RMDs for 2009
Per CCH writeup, H.R. 7327 “suspends” RMDs for 2009 (as based on balances at YE2008). To clarify, does “suspend” mean (1) “permanently cancels” or (2) “defers till later,” so 2010 would require RMDs for both 2009 and 2010? If (2), presume 2009’s RMD could be taken wholly or in parts in both or either 2009/2010? Thanks for any comments (recognizing, of course, that the Bill still awaits presidential signature). Bart Massey
Permalink Submitted by Jose Morales on Mon, 2008-12-15 23:58
If the bill’s language is specific to 2009 then I don’t think it effects 2010 in any way. I am sure that if the bill is signed by the President we will have IRS/Treasury announcements with more details. I don’t see any mention of applying distributions taken in 2009 towards 2010, so I wouldn’t jump the gun and assume that. I’m guessing that any 2009 distribution would be volundary and be no different than any other distribution taken after the age of 59 1/2.
Permalink Submitted by Alan Spross on Tue, 2008-12-16 00:23
I agree.
While the RMD for 2009 is suspended, those that do not take any distribution for 2009 will obviously cause all later RMDs to be slightly higher, so in one sense the specific 2009 RMD is cancelled and in another sense it is just deferred incrementally to each succeeding year.
Permalink Submitted by Clyde Wolf on Thu, 2008-12-18 00:45
For those in the life span of RMDs, for 2008 and 2009 we can make tax free donations up to a maximum of $100,000 from from our IRA. This could help to keep some of your SS benefit from being taxed.
Permalink Submitted by Janine Janine on Thu, 2008-12-18 22:41
Why would one make QCD’s from a seriously downward spiral IRA account? To reduce the income tax hit? It really does not reduce your income taxes that much unless you are willing to give away a substantial part of your retirement resources.
Permalink Submitted by Alan Spross on Thu, 2008-12-18 23:35
I think cwolf was assuming that a charitable gift was going to be made regardless, and if so doing it by QCD would generate more of a tax saving than distributing it to themself, reporting the income and then taking an itemized deduction.
But you obviously still end up with far fewer after tax assets than not making a contribution at all.
Permalink Submitted by Clyde Wolf on Fri, 2008-12-19 02:01
Thanks Alan,
Of course giving heavily appreciated stock benefits the taxpayer the most.
The RMD donation can also be a good benefit to the tax payer.
Permalink Submitted by Janine Janine on Fri, 2008-12-19 16:01
[quote=”[email protected]“]Thanks Alan,
Of course giving heavily appreciated stock benefits the taxpayer the most.
The RMD donation can also be a good benefit to the tax payer.[/quote]
None of our mutual funds have appreciated heavily. On the contrary, they have tanked.
As for the QCD being a good benefit to the tax payer, do you mean a spiritual benefit? Last year while we found that gifting with QCD’s did lower our AMGI, it really did not lower our tax liabilty significantly.
Thank you.