Retirees: don’t you get tired of making those quarterly tax payments? January, April, June and September, like clockwork, you have to hand over tax money, just because you’re receiving a pension, retirement funds, and/or Social Security benefits. What if there was a way to send this money off one time, and then you wouldn’t have [...]
Posts under ‘Early Distribution’
IRA Inheritance – Not Taking Timely Distributions
A commenter from my post on splitting an inherited IRA sparked this particular post – his question was “What are the consequences for not re-titling an inherited IRA as F/B/O?” You can see my response to that specific question at the original article… But that question sparked the idea of discussing what happens when a [...]
Splitting Inherited IRAs
These things can give you a splitting headache… In the case of an IRA, often it is desirable to split an account into two (or more) accounts in order to better accommodate a distribution plan upon the death of the primary owner of the account. This can be done prior to the death of the [...]
TWO 5-year Rules for Roth IRAs
In case the rules surrounding Roth IRAs weren’t confusing enough so far, there are actually TWO different 5-year rules that can apply to your Roth IRA account. 5-Year Rule #1: The Account’s Age In general, the first 5-year period begins on January 1 of the tax year when you established and first funded the account. [...]
Designated Roth Account (Roth 401(k)) Distributions
In a previous post we discussed the general information surrounding Designated Roth Accounts – eligibility, tax treatment, and contributions. In this post we’ll go over the nuances involved in distributions from a Designated Roth Account under a 401(k). Distributions are a little different from most other retirement plans, as you might guess… Required Minimum Distributions [...]
Converting Directly From a 401(k) to a Roth IRA
Back in the olden days prior to 2008, it was against the rules to convert funds directly from a 401(k) plan (or other CODA plan, like a 403(b)) to a Roth IRA. At that time, you were required to do the “conversion two-step” wherein you would first rollover or direct-transfer your funds from the 401(k) [...]
The “Default” Default Distribution Period
We’ve talked about all kinds of issues surrounding distribution periods, but there’s at least one more facet of distribution periods that we have not addressed just yet. What happens when there is no designated beneficiary for the IRA account? More specifically, what is the longest distribution period that heirs are allowed to stretch an IRA [...]
Are 72t Payments Also Exempted in 2009?
This is a follow-up to my original post regarding the RMD Holiday for 2009. If you’re taking a Series of Substantially Equal Periodic Payments (SOSEPP), also known as 72t payments, from an IRA or other plan, you are not allowed to “skip” a payment for 2009. The reasoning behind this is that your 72t payments [...]
Recharacterizing
For IRA contributions, the concept is simple: a certain amount may be contributed to the account each year, dependent upon the type of IRA and your MAGI (this is all covered here if you need a refresher). But what if you find out that you are ineligible to contribute to a Roth IRA due to [...]
2010 Conversions to Roth: Six Factors to Consider
If you have considered converting funds to a Roth (the IRA, not David Lee) from a traditional IRA or a qualified (tax-deferred) plan like a 401(k), undoubtedly you have run across this tax code item: in 2010, the income limit for Roth conversions is lifted. On top of that, the IRS will give you two [...]
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