Important October IRA Deadlines

Friday, October 09, 2015

By Beverly DeVeny, IRA Technical Expert
Follow Me on Twitter: @BevIRAEdSlott

There are two important dates in October, the 15th and the 31st. Read on to learn more about these deadlines and dates to put on your calendar.
 

October 15
 

  1. This is the last date for filing a personal income tax return that is on extension.
     
  2. It is the last date for making most SEP IRA contributions if the employer’s tax return is on extension to the 15th. However, it is too late to make other IRA contributions even if a return is on extension.
     
  3. It is the last date for recharacterizing a 2014 Roth IRA conversion. The recharacterization must be completed (not just started) by the 15th. A taxpayer can also recharacterize an IRA contribution to a Roth IRA or a Roth IRA contribution to an IRA.
     
  4. It is the last date for withdrawing an unwanted 2014 IRA contribution or avoiding the 6% penalty by correcting an excess IRA contribution. Any excess 2014 contribution not corrected by this date will be subject to a penalty of 6% of the excess amount for 2014.
     

October 31
 

  1. This is the IRA trust deadline for IRAs that were inherited by a trust in 2014. A copy of the trust, or a list of all its beneficiaries and their entitlements must be provided to the IRA custodian or plan administrator by the 31st. This is unfortunately the responsibility of the trustee of the trust. Why do I say unfortunately? Because the trustee of the trust is frequently a “clueless” family member. It is not the attorney’s responsibility, or the financial advisor’s job, or the CPA’s duty. A trust beneficiary must meet this requirement in order for the trust to be determined a see-through trust and to be able to use a life expectancy for calculating RMDs that will go to the trust each year. It is also the requirement that is most frequently missed, which can lead to a failure of the estate plan of the deceased IRA owner.

The 31st is also Halloween. Once you have taken care of the two deadlines above, let the child out in you and prepare to have fun!  

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