Individual Retirement Accounts (IRAs) are used by many people to save for retirement because of the benefits of contributing to IRAs while you are working. However, if you want to access the money in your IRA before age 59 ½, you may owe taxes on the withdrawal, in addition to the hefty 10 percent penalty for early withdrawals.
A tax and retirement planning tool used by some individuals has been eliminated with the passage of the Tax Cuts and Jobs Act (TCJA). However, even though we may be losing an effective tax planning opportunity, all is not lost. There are still some ways to use IRA recharacterizations that comply with the TCJA.