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If a retirement account transaction becomes a taxable distribution, you probably know you will owe taxes and possibly the 10% early distribution penalty (if under age 59 ½) on the distribution. But what you may not know is there might be an unexpected surprise. On top of the additional taxes and 10% penalty, you might also be liable for what’s called the “accuracy-related penalty.” Here’s what you need to know about this unpleasant revelation.

A married couple lived together the entire year of 2020. Taxpayer’s wages were $90k. Spouse’s wages were $84k. Combined AGI...

A married couple lived together the entire year of 2020. Taxpayer’s wages were $90k. Spouse’s wages were $84k. Combined AGI...

The so-called “rule of 55” allows penalty-free early distributions from a 401k if the participant separated from the employer after...

If you are younger than age 59½ and want to withdraw money from your individual retirement account, there are several exceptions that could allow you to do so without incurring the 10% early-withdrawal penalty from the IRS. One such exemption being used more often is a so-called 72(t) plan.

Question: My husband is the sole beneficiary of a Traditional IRA owned by his cousin, who recently passed away. From my research, I believe my husband fits the exception criteria of "eligible designated beneficiary" in that he is not more than 10 years younger than the deceased (he is 9 years younger…he is age 72 and the deceased was age 81). As such, from what I read, he does not have to empty the inherited IRA account within 10 years and can withdraw his RMDs using the stretch IRA method.

A taxpayer we will call “Mary” owned both an Traditional IRA and a SIMPLE IRA with different custodians. After a...

My mother passed away this year and one of my siblings plans to take her share of the inherited IRA...

Each week the Ed Slott team answers questions from financial advisors across the country. Sometimes we see a pattern in repeating questions, sometimes the questions are relatively basic, and sometimes they are real stumpers. We never know what the next phone call or email will bring. Recently, we’ve fielded a rash of inherited IRA inquiries. Here are a few:

Hello – If someone has a Roth IRA funded exclusively w/ after-tax contributions, AS WELL AS a Roth CONVERSION IRA...