Taking Early Withdrawals From Retirement Accounts
Posted on October 2nd, 2020
While taking money out of a retirement fund before age 59 1/2 is usually not recommended, in certain cases, it may be unavoidable, especially during times of economic crisis. If you need cash and have a retirement fund you can tap, here’s what you need to know. Read More…
Choosing a Retirement Destination: Tax Considerations
Posted on October 1st, 2020
With health care, housing, food, and transportation costs increasing every year, many retirees on fixed incomes wonder how they can stretch their dollars even further. One solution is to move to another state where income taxes are lower than the one in which they currently reside. Read More…
Temporary Relief for Retirement Plan Participants Issued
Posted on August 3rd, 2020
Temporary administrative relief has been issued that helps certain retirement plan participants or beneficiaries who need to make participant elections by allowing flexibility for remote signatures. Generally, signatures of the individual making the election must be witnessed by a notary public or in the presence of a plan representative. This includes a spousal consent as well. Read More…
Tax Extenders, Retirement Plan Changes, and Repeals
Posted on February 2nd, 2020
In addition to averting a government shutdown, the Further Consolidated Appropriations Act, 2020, signed into law on December 20, 2019, extended a number of expired tax provisions for businesses and individuals through 2020. It also included several retirement plan changes and repealed three health care taxes. Here’s what you need to know. Read More…
9 Ways to Avoid the Penalty on Early Distributions
Posted on February 6th, 2019
Many people use IRAs, SEP Plans, SIMPLE IRA plans, and employee-sponsored retirement savings plans such as the 401(k) to save money for their retirement years, but what if you need to tap that money before age 59 1/2? The bad news is that you generally have to pay a 10 percent penalty for early withdrawal of your funds. While that may seem unfair (after all, most of it is probably your money), you need to remember that the purpose of these types of plans is to save money for the years when you are no longer working. Read More…
There’s Still Time to Make a 2017 IRA Contribution
Posted on March 1st, 2018
If you haven’t contributed funds to an Individual Retirement Arrangement (IRA) for tax year 2017, or if you’ve put in less than the maximum allowed, you still have time to do so. You can contribute to either a traditional or Roth IRA until the April 17 due date, not including extensions.
Be sure to tell the IRA trustee that the contribution is for 2017. Otherwise, the trustee may report the contribution as being for 2018 when they get your funds.
Generally, you can contribute up to $5,500 of your earnings for tax year 2017 (up to $6,500 if you are age 50 or older in 2017). You can fund a traditional IRA, a Roth IRA (if you qualify), or both, but your total contributions cannot be more than these amounts.
Traditional IRA: You may be able to take a tax deduction for the contributions to a traditional IRA, depending on your income and whether you or your spouse, if filing jointly, are covered by an employer’s pension plan.
Roth IRA: You cannot deduct Roth IRA contributions, but Read More…
April 1 Deadline for Retirement Plan Distributions
Posted on March 1st, 2018
In most cases, taxpayers who turned 70 1/2 during 2017 must start receiving required minimum distributions (RMDs) from Individual Retirement Accounts (IRAs) and workplace retirement plans by Sunday, April 1, 2018.
The April 1 deadline applies to owners of traditional (including SEP and SIMPLE) IRAs but not Roth IRAs. Normally, it also applies to participants in various workplace retirement plans, including 401(k), 403(b) and 457(b) plans.
The April 1 deadline only applies to the required distribution for the first year. For all subsequent years, the RMD must be made by December 31. In other words, a taxpayer who turned 70 1/2 in 2017 (born after June 30, 1946, and before July 1, 1947) and receives the first required distribution (for 2017) on April 1, 2018, for example, must still receive the second RMD by December 31, 2018.
Affected taxpayers who turned 70 1/2 during 2017 must figure the RMD for the first year using Read More…