The IRS updated Publication 590, Individual Retirement Arrangements (IRAs) For use in preparing 2012 Returns. This publication is a good source of basic information about Traditional and Roth IRAs, simplified employee pension (SEP) plans, and savings incentive match plans for employees of small employers (SIMPLE) IRA plans. Pub 590 contains a section called “What’s New for 2012.” See some of the notable changes below.
Tick, tock, tick, tock. 2013 is almost here, and we at The Slott Report want to provide a few more important points to remember if you are still sorting through year-end retirement planning. These are the questions I am getting most frequently as we near the end of the year.
You inherited an IRA or a Roth IRA. Since you are not age 70 ½ yet, you did not think you had to take required distributions (RMDs) or maybe your advisor told you that. WRONG!!!A non-spouse beneficiary generally must take his first required distribution in the year after the account owner's death.Here are the rules for a beneficiary that is named on the beneficiary form (or is named through the document default provisions). These rules do NOT apply to beneficiaries who inherit through an estate. They may be the same for a beneficiary who inherits through a trust, but that is a way more complicated situation and you should be working with a knowledgeable advisor to determine how RMDs to the trust will be calculated.We are going to assume that you have set up a properly titled
If you're like the majority of people - including financial advisors and accountants - here's something you probably don't know. IRA does NOT technically stand for individual retirement account. Instead, the IRA stands for Individual Retirement Arrangement. If you don't believe me, just check out IRS Publication 590. It's right there on the cover. With that said, let's discuss what each of these three little words means in a little more detail.
Even though the 2011 tax season for most of us ended on April 17, 2012, some of us who made a timely IRA contribution for 2011 might have changed our mind on that IRA contribution. Specifically, some individuals who contributed to one type of IRA for last year may now want to change that contribution into a different type of IRA contribution.
This week's Slott Report Mailbag features your questions (and our answers) on topics including non-spouse beneficiaries, the Income in Respect of a Decedent (IRD) and IRA rollovers. Click to read a Q&A with our IRA Technical Consultants.
An employer retirement plan, such as 401(k) plan may provide for hardship distributions. A hardship distribution must be for an immediate and heavy financial need of the employee, his spouse, or dependent. Hardship distributions are generally taxable and cannot be rolled over to an IRA or other retirement plan. They are also subject to the 10% early distribution penalty (unless an exception applies).
IRAs and tax season go hand in hand. Below are a list of the most popular IRA tax-related questions we have been receiving over the last month or so. Make sure you are up to speed on what you can and can't do to get the most out of your tax return, and in turn, your retirement planning.
Let me start out by saying there is no such thing as a hardship withdrawal from an IRA. An IRA owner generally has unlimited access to their IRA funds for any reason whatsoever (unless they are in an investment that limits their access). There is no age restriction on taking a withdrawal from the IRA. So, there is no need to prove a hardship. So, there is no need to prove a hardship. BUT, if you do take a withdrawal before you are age 59 ½, then there is an extra tax to pay.
Horror stories are tough to hear. Below we share a story from someone given poor advice by his financial advisor. We also answer two other questions in this week's installment of The Slott Report Mailbag.
