Also, any beneficiaries who qualify as EDBs (eligible designated beneficiaries) still get to use the stretch IRA, even for deaths after 2019. They too must continue on that schedule. EDBs are generally spouses, minor children of the deceased IRA owner (but only up to age 21), disabled or chronically ill beneficiaries, or non-spouse beneficiaries who are not more than 10 years younger than the deceased IRA owner (for example, a friend, partner, sibling, etc.).

IRA Beneficiaries Who Do Not Have To Take RMDs In 2023
IRA beneficiaries who inherited in 2020 or later from someone who died before beginning RMDs, and who are subject to the 10-year rule, do not have to take annual RMDs for years 1-9 of the 10-year term. So, there was no need for the IRS to waive RMDs for these people.

Roth IRA beneficiaries subject to the 10-year rule are also not required to take annual RMDs on their inherited Roth IRAs for years 1-9 of the 10-year term, regardless of whether the deceased Roth IRA owner died before or after starting RMDs. Once again, no waiver was needed.

RMD Planning Strategy
Now that you know who has to take an RMD and who doesn’t, let’s look at the long-term tax planning. Even if an IRA owner or IRA beneficiary is not required to take an RMD for 2023, should they take a distribution anyway?

It may pay to voluntarily withdraw some funds from IRAs or inherited IRAs to smooth out the tax bill over more years. For example, a traditional IRA beneficiary subject to the 10-year rule might not have to empty most or all of the inherited IRA until the end of the 10 years. But that inherited IRA could grow to be a big chunk by that time, and taxes on the withdrawal could possibly be much higher than they would be today. Spreading that income out over several years, while taking advantage of the current historically low tax rates, might save substantial taxes. (This strategy does not apply to Roth IRA beneficiaries, since they should hold the inherited Roth IRA for the full 10 years and take advantage of the income tax-free accumulations over that time).

The idea of voluntary IRA distributions goes for traditional IRA owners as well.

It could make sense for them to withdraw some IRA funds before RMDs kick in, and then convert those funds to Roth IRAs. For IRA owners already subject to RMDs, it might be wise to withdraw more than the required amount based on how much can be withdrawn while still staying in the lower tax brackets.

Below are the 2023 income tax brackets (as well as the new 2024 brackets which have been expanded due to inflation indexing). Any part of a tax bracket not used is lost forever, so don’t waste a low bracket. Also, depending on what Congress does, these low tax rates may not be around much longer. Use these brackets to help clients make tax planning decisions before 2023 comes to a close, and they’ll be sure to thank you when tax time comes around.

Ed Slott, CPA, is a recognized retirement tax expert and author of many retirement focused books. For more information on Ed Slott, Ed Slott’s 2-Day IRA Workshop and Ed Slott’s Elite IRA Advisor Group, please visit On December 13 at 1:00 p.m., Mr. Slott will conduct a webcast on Navigating Year-End Strategies with FA Magazine. To register, click here.

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