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ANNOUNCING the new revised edition of Barry Picker's Guide to Retirement Distribution Planning. The revised edition contains all the changes to the retirement distribution rules as contained in the final regulations. All of the life expectancy tables have been updated. The cost is still $24.95, plus $1.75 S&H. You can order it hereonline, or by calling 1-800-809-0015.

Many taxpayers who have set up pre age 59½ substantially equal periodic payments under IRC Section 72(t) to avoid the 10% penalty now run the risk of depleting their retirement account due to the decline of the stock market. We have requested private letter rulings on behalf of taxpayers to get permission to make a downward adjustment of the withdrawals, without triggering the retroactive application of the penalty. In addition to our efforts, letters have been sent to the IRS and Treasury Department to try to get the IRS to allow these changes. If you would like to get IRS permission to reduce your Sec 72(t) withdrawals, now is the time to act. The more people who show that they need relief, the better the chance the IRS will change their policy. Contact us if you run the risk of depleting your retirement savings due to your Sec 72(t) plan would like us to assist you in obtaining a private letter ruling.

On April 17, 2002, the IRS finally issued final regulations on computing minimum required distributions from retirement accounts, including IRAs. Details of the provisions that were changed from the January, 2001 proposed regulations are in the article Final Distribution Regulations. The final regulations have revised uniform distribution and life expectancy tables. You can see these tables, and the entire text of the regulations on Ed Slott's excellent web site. Also see the article New Minimum Distribution Regulations Bad News for Some Beneficiaries. If you're a beneficiary, you could be in for a rude awakening.

NOW that 2002 is here, certain provisions of the ECONOMIC GROWTH AND RELIEF RECONCILIATION ACT OF 2001 (EGTRRA) are in effect. Details are in the article Tax Changes Effective for 2002 . Here are some quick examples:

---The maximum IRA contribution, both traditional and Roth, is $3,000; $3,500 if over age 50 by December 31, 2002. The maximum contribution to 401(k), 403(b) and 457 plans have also been increased. These plans also have an increased contribution limit for those over age 50 by December 31, 2002.

---The unified credit equivalent for estate and gift taxes is now $1 million.

---The annual gift tax exclusion is now $11,000.

The article, Retirement Provisions of "The Economic Growth and Tax Relief Reconciliation Act of 2001"has been updated, with apologies for not having done it sooner.

Congress has passed, and the President has signed, a bill extending combat tax relief to victims of September 11, Anthrax, and the 1985 Oklahoma City bombing. The tax relief includes income tax forgiveness, possibly a refundable credit, and, if applicable, a reduction in estate taxes.

President Bush has signed into law, P.L. 107-16, "Economic Growth and Tax Relief Reconciliation Act of 2001" (EGTRRA of 2001). See our article on some of the provisions that affect retirement account. There is also a great summary at 72t on the net

If you screwed up your retirement accounts by failing to timely recharacterize an improper 1998, 1999 or 2000 Roth conversion, speak to us. We have successfully gotten IRS permission for clients to make late recharacterizations. But this can only be done with specific IRS permission.

NOTICE: The deadline for recharacterizing 2000 conversions has past. The deadline for recharacterizing a year 2001 conversion is October 15, 2002. If you now recharacterize a year 2001 conversion and wish to again convert those funds to a Roth IRA, you must wait until the 31st day after the recharacterization.

If you would like Barry to speak to your company or organization, a few dates are open. Email us at speak@BPickerCPA.com .

Deadlines to remember: (a) If you wish to have a Keogh account for year 2001 and you did not previously have a Keogh account opened, you must have opened the Keogh account by December 31, 2001. Once the Keogh is opened, you have until the extended due date to completely fund the Keogh. (b) The deadline for year 2001 Roth conversions has past. The deadline for year 2002 Roth conversions is December 31, 2002. (c) The deadline for year 2001 Roth IRA contributions, and year 2001 Traditional IRA contributions, is April 15, 2002. (d) You have until the extended due date of your tax return to both open, and fund, a SEP account for 2001.

It has come to our attention that certain IRA custodians do not permit you to have multiple IRA accounts with different beneficiaries. They assume that the last form you filed, either a new account application or a change in beneficiary form, overrides all previous beneficiary designations. If you have multiple IRA accounts in one institution, it is IMPERATIVE that you check to see who the institution considers to be your beneficiary on each account. We suspect that there will be many unpleasant surprises in the years to come if people are unaware of this problem.

We will be updating this page periodically. Please check again soon.

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