The IRS has recently changed regulations regarding distributions from retirement accounts.  These changes are retroactive to January 1, 2001.  The focus is on simplification of retirement distribution decisions.  No longer will we have to struggle with single life vs. joint life and recalculation vs. term certain decisions in order to make expectancy elections for calculating Required Minimum Distributions (RMD’s).  All eight of the former options have been reduced to a single life expectancy standard and one IRS table.  What is most significant is that this new table was actually the most generous table under the old rules.  This new table should reduce the level of Required Minimum Distributions for most individuals.

Short term there are several planning opportunities to benefit you.

·     Anyone past the Required Beginning Date should act now to correct improper decisions.

Do you have control of your business records?  Control requires establishment of a system that: (1) makes filing easy and efficient; (2) provides for quick retrieval; (3) offers adequate protection of records against theft, loss or destruction; (4) establishes clear parameters between current files and inactive records; and (5) establishes specific deadlines and procedures for records destruction.  Since excess record retention is extremely costly, it’s particularly important to focus on the last point.  One of the best sources for determining appropriate records retention periods is the “Guide to Record Retention Requirements in the Code of Federal Regulations” published by the National Archives and Records Administration.  Following is a partial listing:

Audit reports; capital stock and bond records; cash books; charts of accounts; vital checks; contracts in effect; legal and important correspondence; deeds; mortgages and bills of sale; depreciation schedules; financial statements; general/private ledgers and year-end trial balances; insurance records; journals; corporate minutes; patent records; independent property appraisals, property records; retirement and pension records; tax returns; trademark and copyright registrations; union agreements

Suggested Retention Period:  Permanent

Settled accident reports and claims; accounts payable and accounts receivable ledgers and schedules; canceled checks (general); expired contracts, mortgages, notes and leases; expense analysis and distribution schedules; garnishments; inventories; customer and vendor invoices; notes receivable ledgers and schedules; payroll records and summaries; personnel files (terminated); plant cost ledgers; purchase orders; sales records; scrap and salvage records; canceled stock and bond certificates; subsidiary ledgers; time records; voucher registers and schedules, and payment vouchers, withholding tax statements

Suggested Retention Period:  7 Years

Suggested Retention Period:  3 Years

Bank reconciliations; general correspondence, duplicate bank deposit slips

Suggested Retention Period:  2 Years

Magnetic tape and tab cards; purchase order (except purchase department copy); receiving records; requisitions; stenographers’ notebooks, stockroom withdrawal records

Suggested Retention Period:  1 Year

Copies of the government’s “Guide” can be obtained from Superintendent of Documents, U.S. Government Printing Office, Washington, D.C. 20402-0325.  Assistance with development of sound and efficient filing systems is available from us.