2024 Year-End Action Items for IRA Owners

As unbelievable as it sounds, we're now approaching the busy year-end holiday season. At the same time, IRA owners should be advised about some valuable – and often required – year-end action items for their IRAs. First and foremost, taxpayers who reached age 74 or older this year must take their required minimum distribution (RMD) by December 31. Taxpayers who turned 73 in 2024 technically have until April 1, 2025 to take their first RMD, although they should be advised about the tax consequences of taking two RMDs during 2025. Beneficiaries who inherited IRAs prior to 2020 are also required to take an RMD for 2024, as are eligible designated beneficiaries who retain the benefit of using the life expectancy rule to determine distributions. Note that inherited account beneficiaries who are subject to the ten-year rule can take advantage of IRS relief and skip their 2024 RMD (although their RMD obligations will resume next year). Taxpayers who are at least 70 1/2, and are interested in giving to charity while reducing their taxable income might also consider the qualified charitable distribution (QCD) strategy, which must also be completed by year-end. IRA owners may also be interested in executing Roth conversions in 2024, given that the 2017 tax cuts are set to expire in just over a year (absent Congressional action to extend the lower rates). For more information on the rules governing QCDs, visit Tax Facts Online. Read More: Link to Q3991.