Many IRA owners do not realize that they can only do one IRA-to-IRA or Roth-to-Roth rollover, per IRA or Roth IRA account, per year. If you have more than one IRA or Roth account, you can do one rollover from each account. So you could do five rollovers when you have five IRAs. If you do a rollover on April 20th, you cannot do another rollover from that account until the next April 20th.
Can you believe that we are already in May? And in 2012 no less? In the spirit, somehow fast forwarding into the future and being in May of 2012, here are 12 things you may not do with your retirement account.1)
You may not convert or rollover a required minimum distribution (RMD). A year’s RMD must be taken prior to making any such transaction.2)
You may not claim “hardship” as an exception to the 10% early distribution penalty. No such exception exists!!3)
You may not name your estate as your IRA beneficiary if you want your beneficiaries to stretch your IRA. 4)
You may not make a Roth contribution for 2012 if your income is above certain thresholds. Click here to see those thresholds.5)
You
This week's
Slott Report Mailbag answers questions about spousal beneficiaries, inherited IRAs and keeping the Stretch IRA provision (biggest benefit in the tax code!) for your heirs and required minimum distributions.
As always, we stress the importance of working with a competent, educated financial advisor to keep your retirement nest egg safe and secure. Find one in your area at this link.1.Ed:I have your book, but unfortunately it is at my cabin so I don't have access right now. I am inheriting a Roth IRA from my wife, who recently passed away at 65. It was converted to a Roth in December 2008. First question: Is it better to keep it as a separate Roth IRA, or add it into my existing Roth IRA?
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.
