Recently, we wrote about potential tax advantages available to individuals who receive lump sum distributions from employer-sponsored qualified retirement plans. Both articles confirmed that to qualify for either one of these provisions a lump-sum distribution must be received in one taxable year. This has prompted many questions on how lump-sum distributions are reported and taxed on an individual’s income tax return.
Most tax returns are done, 1099-Rs have been received, 2011 contributions have been made, and 5498s will be out by the end of next month (May). What's left to be done? Only the double (and triple) checking. Did you make a contribution in 2012 for 2011? Double check now to be sure the IRA custodian coded it as a 2011 contribution. Also double check that it went into the correct account, IRA or Roth IRA, your account or your spouse’s account, IRA or non-IRA account. Now is the time to fix any mistakes, not next year.
There are many questions and circumstances to discuss when dealing with minor beneficiaries. This question-and-answer session is aimed to fill in some of the blanks and start a discussion with your financial advisor based on a foundational depth of knowledge.
Financial Services Organization TIAA-CREF recently conducted a survey among Americans to gauge their understanding of IRAs. The less than stellar results are not surprising. We take a look at the survey below.
Here are two questions that come up a lot at tax time: Can I do a conversion now for 2011? and Joe died last year. He had earned income. Can we make a contribution to his IRA or Roth IRA account for last year. Find the answers below.
With Tax Day right around the corner, it is the perfect time to answer the most popular questions involving IRA and Roth IRA contributions. Below are five of the more popular questions.
There is a little known provision in the tax code that can provide a huge income tax advantage in the right circumstances. We explain this provision and how it may affect you below.
One of the most effective ways to accumulate a large retirement nest egg is to start young. And no age is too young. In fact, the younger the better. Even a one year-old can make an IRA, or better yet, a Roth IRA, contribution as long as they have earned income – perhaps as a model in a Gerber Baby Food commercial. In reality though, most people don’t start contributing to retirement accounts until much later on in life.
Last week I said that some taxpayers may be forced to take funds from their Roth IRA to pay the income tax due on a Roth IRA conversion. Yes, you can take money out of your Roth IRA. Generally there is no income tax due on a distribution, but if you are under age 59 ½ you may owe the 10% early distribution penalty. Here’s the way it works.
We have discussed the importance of an IRA beneficiary form at length. You should always know where a copy is for yourself and make sure your financial advisory team has a copy on hand as well. Also, you must make sure the beneficiary form is current to reflect your financial wishes (who is getting what).
