Required Minimum Distributions
Individuals who have reached age 72 during 2020 (701/2 prior to 2020) and are retired generally need to make sure that they are making their required minimum distributions (RMDs) from IRAs. However, the CARES Act eliminated the need to take RMDs for 2020.
Despite the CARES Act waiver, it may still be worthwhile to take a distribution in 2020, thereby reducing the size of future RMDs, if it appears that tax rates will go up if Biden wins the election.
The TCJA-increased unified exclusion amount for gift taxes is not scheduled to expire until 2026. However, if Biden wins, one possibility is that many of the provisions of TCJA could be rolled back sooner than that. It would be worth considering making any gifts before the end of 2020 to take advantage of the higher exclusion while it is still certain to be available.
For more information about year-end tax planning, contact your Larson & Company CPA today.