Earlier this year, the CARES Act injected our economy with over two trillion dollars to provide COVID-19 relief for business owners, individuals, and retirees.
The CARES Act waived Required Minimum Distributions (RMDs) that were scheduled to be paid in 2020. If you have already taken your RMD, you have the ability to roll the money back into your retirement plan. As of June 23rd, 2020, the IRS has extended the 60-day rollover period to August 31st, 2020. RMD recipients have until then to return RMDs to their IRA or qualified retirement plan. By rolling your RMD back over to your plan, you will defer paying taxes on it.
Rolling over your RMD may be a good strategy because by reversing your RMD, your distributions will not be considered taxable income for 2020. However, it is essential to consider your cash flow for the year and overall tax situation before doing so. If you’re considering reversing your 2020 RMD, talk to your financial advisor before making any changes.
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