Tax & Accounting Blog

Driving Revenue with UltraTax CS Data Mining, Part 2: Identifying IRA Holders Who Are Subject to a Required Minimum Distribution

CS Tax & Asset Management Solutions June 10, 2014

There are some requirements that clients love to ignore until it’s too late, and the required minimum distribution (RMD) for IRA holders over 70 ½ is one of them. We’ve all been there: you notify the client of the requirement, they ignore it, and you’re ultimately the one who has to deliver the bad news about an IRS penalty. 

What you may not know is that UltraTax CS Data Mining makes it very easy to send a detailed paper or email notification to every single client who is subject to the RMD requirement. In just a few minutes, you can:               

  • Create a report listing every client who is subject to the RMD requirement
  • Send each of these clients a paper or email notification. You can use a pre-created letter or write one yourself. 

This kind of personal attention is guaranteed to impress your clients. You can easily send them as many notifications as it takes. Your clients will be much less likely to drop the ball, and you won’t have to be the bearer of bad news. 

What I like about data mining is that you only have to build the report once; after that, you can use it over and over again. So what looks like a very involved process to your clients only takes a few minutes of work on your end. Here’s how to do it: 

Step 1: Create a report that lists all clients who are subject to the RMD requirement 

  1. In UltraTax CS, chooseUtilities > Data Mining.
  2. Select the 1040 Individualdatabase and click Continue (Step 2).
  3. From the Step 2 window, click the Design Custom Reports button near the top right, click Add to create a new report, and enter a title. 
  4. Select 1040 Client List w/Invoices as your report template, then click Continue.
  5. Remove the following columns by highlighting each item in the Columns in layout list and clicking Remove.
    • Client TIN
    • Letter, client invoice number
    • Net invoice amount
    • Complexity factor
  6. Leaving the Product drop-down set to General, scroll down the list and select the columns for Taxpayer age – 1/1/NY  and Spouse age – 1/1/NY.
  7. Select the Federal product in the drop-down at the top-left, click the Input screen field option, and click the Select Field button to the right.
  8. Open the Retirement folder, click the IRA  tab, click to highlight the taxpayer Traditional IRA value on 12/31/13  field, and click Select below.
  9. Repeat Step 8 for the spouse.
  10. You may want to reduce the Field Length character limit on the Preparer Name and/or Client Name column(s) to make the report small enough to print.
  11. Click OK to save the report, then Done to close the custom report list.

Step 2: Generate the report using built-in searches 

Data Mining includes a built-in search that you can use to find clients who are subject to the RMD requirement and populate the report you created in step 1. Here’s how to use it: 

  1. If necessary, choose Utilities > Data Mining, and then select the 1040 Individual database and click Continue (Step 2).
  2. From the Step 2 window, with the Reports option selected, highlight the report you just created and then click the Select button.
  3. Click the Add/Modify Searches  button.
  4. Highlight Minimum required distribution – Taxpayer, then click the Combine Searches button.
  5. Highlight Minimum required distribution – Spouse, click the Select button, and then click Done.
  6. Click Done again to leave the Add/Modify Searches  screen. The combined search locating both taxpayers and spouses subject to the age criteria is now selected.
  7. Click Continue (Step 3) to run your search and advance to Step 3.  This process may take a few minutes to complete.
  8. In the Print where dialog, choose what you’d like to do with the report. You can print a paper copy, email a PDF, or print the report directly to FileCabinet CS.
  9. Click Print

Step 3: Notify clients 

Once you’ve identified your RMD candidates, you can have UltraTax CS automatically generate a paper or email notification. You can use the pre-written notification included in UltraTax CS, or you can write your own. See the Optional extras section for instructions on customizing the notification. Here’s how to generate the notification letters and emails: 

  1. If necessary, choose Utilities > Data Mining, and then select the 1040 Individual database and clickContinue (Step 2).
  2. Select the Minimum required distribution – Taxpayer search from the Search name drop-down list.  Note that UltraTax CS automatically combines the Minimum required distribution – Taxpayer and Spouse searches since those searches were combined in steps 4 and 5 above. Also note that UltraTax CS automatically selects the Minimum Required Distribution letter in the Selected to print pane above.
  3. Click Continue (Step 3) to run your search and advance to Step 3.  This process may take a few minutes to complete.
  4. In the Print where dialog, choose how you’d like to distribute the letter. You can:
    1. Print paper copies
    2. Have UltraTax CS automatically email PDFs to clients with an email on file
    3. Have UltraTax CS automatically email PDFs to clients with an email on file and print paper copies for clients who do not
  5. Click Print.
  6. UltraTax CS will use your MAPI-compliant default e-mail client to e-mail PDF copies of the notification, and/or print paper copies depending on what you selected in step 4. 

Optional Extras 

UltraTax CS Data Mining also includes additional options that enable you to customize the notification letters you send to your clients, whether you send them on paper or via email. They include: 

The ability to customize the Required Minimum Distribution (RMD) letter that’s included in UltraTax CD Data Mining.  By using the pre-written RMD letter included with UltraTax CS as a starting point, you can quickly add a personal touch to the notifications that you send to your clients. 

The ability to create a new RMD letter from scratch. UltraTax Data Mining also enables you to write your own RMD letters from scratch. You can create as many customized letters as you choose, making it possible to send different letters to different clients. 

The ability to include the exact required minimum distribution (RMD) amount in each client’s notification. 

I’ve created a PDF document that details how to use these optional extras; you’ll find it here.

Come back on June 24 for my next data mining blog, where I’ll describe how to use UltraTax CS Data Mining to find sole proprietor clients who may benefit from reorganizing as an S Corporation. In the meantime, feel free to pos
t your questions and comments below.