Pub. 2 2012-2013 Issue 4

14 O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S - H E L P I N G C O L O R A D A N S R E A L I Z E D R E A M S the use of the Uniform Lifetime Table to obtain the distribution period. The distribution periods from this table are equal to the joint life expectancy of an account owner and a beneficiary who is exactly 10 years younger, regardless of the actual beneficiary’s age or even whether a beneficiary is named. One exception to using the Uniform Lifetime Table is when the account owner’s spouse is the sole primary beneficiary at all times during the dis- tribution year and is more than 10 years younger than the IRA owner. In that case, refer to the Joint Life Expectancy Table to find the distribution period using the ages the IRA owner and the spouse beneficiary will become in the distribution year. These tables may be found in the ap- pendix of IRS Publication 590, Individ- ual Retirement Arrangements (IRAs) . Harsh Penalty As the phrase implies, the RMD is a minimum requirement, the least pos- sible amount that an account owner must distribute each year. An account owner may always withdraw more than the minimum amount. Withdrawing more than the minimum, however, does not count toward future RMDs; account owners still must calculate and distrib- ute an RMD in each subsequent year. If an account owner fails to remove an RMD in a timely manner or if the amount distributed before the deadline is less than the RMD for that year, the account owner is subject to an excess accumulation penalty tax equal to 50 percent of the amount that should have been distributed but was not. An employer that assumes responsi- bility for missed retirement plan RMDs may use the IRS’ Voluntary Correction Program to correct the missed RMD. When corrected, the participant will not be subject to the excess accumula- tion penalty tax. If submitting through the program, the plan must make sure that the RMD is distributed to the par- ticipant. Bene fi ts With a clear understanding of the RMD rules, you can competently assist your clients with their RMDs and take away some of the worry and confusion that they (and you) may have. And by adhering to the RMD rules, your clients not only avoid hefty penalty taxes, but distributing the minimum amount each year helps them stretch out their income for retirement. Moreover, your respon- sibility of assisting with these calcula- tions will help your organization better maintain compliance with the IRS. Q Lisa Walker researches and writes about various IRA topics for Ascensus’ online and printed publica- tions and education materials, including Ascensus workshops and webinars, the IRA Institute, the IRA Reference Service, Retirement Central®, and the Retirement Plans Bulletin. She is also an Ascensus IRA Online Institute instructor. Q RMD SEASON – continued O WN THE REAL ESTATE YOUR BUSINESS ALREADY PAYS FOR CEDCO S MALL B USINESS F INANCE C ORPORATION Colorado's SBA 504 Loan Expert™ 1175 O SAGE S TREET , S UITE 110 D ENVER CO 80204 ÊÊÊÊÊÊÊÊÊÊÊÊÊÊÊÊÊÊÊÊÊÊÊÊÊÊÊÊÊÊÊÊ Office Locations — Denver, Grand Junction, Colorado Springs 1 - 8 0 0 - 8 4 3 - 8 8 5 2 www.cedco.org • More stability for your operation • A stronger balance sheet • An asset to sell when you’re ready A S A LEADING SBA 504 LENDER WE MAKE IT EASY FOR YOU • Buy, Build, Remodel or Expand Real Estate • Purchase and install long-lasting equipment • Fast, expert processing - with low loan costs • Refinance LÕÃiÃÃ real estate ÀÊiµÕ«iÌ • 7iÊi`ÊÕ«ÊÌÊfxÊ\ÊLÀÀÜÊÕ«ÊÌÊfÓäÊÊ Üi VLi`ÊÜÌÊL>Êv>V} • Interest rate as low as 5.25%, fixed for 20 years • Down payments range from 10% to 20% • Most Small Businesses are Eligible S TREAMLINED P ROCESSING • Front Range and mid-mountains call Sean or Mary Jane 303-893-8989 • Western Colorado call Pat 970-243-1861 CEDCO Small Business Finance Corporation Your Best Source for SBA Real Estate Loans New Easier Qualification Uninterrupted access to money through a monthly SBA-backed bond auction Low fixed-rate financing Low down payments O WNERSHIP M EANS