by Joshua Geary
We’re assuming that by this time, your self-directed IRAs and other IRAs as well as ROTH IRAs or other vehicles you may have – are all in place. But giving them a more in-depth scan would be a healthy resolution for the New Year. There’s always the chance that one or two areas could be improved – a difference of a few thousand dollars more for your pocket.
Before 2006 ends, here are some elements you may want to check:
(A) RMD – required minimum distributions. If you are 70-1/2 years old or if you are the beneficiary of retirement assets, you may be required to withdraw a certain sum for your retirement account each year. If you fail to make the RMD by the deadline date, you could end up making the IRS richer by paying a penalty of 50% of the balance of the excess accumulation. Speak to your IRA custodian about the use of the fair market value (FMV) of the previous year in determining the amount of this year’s RMD. Since he’ll be submitting to you an FMV statement on the 31st of January the following year, he’s the person who can explain this in detail. Make it your business to know every transaction detail that is carried out – it is YOUR money.
(B) ROTH IRA conversions – if you’re planning to convert your traditional IRA, simple IRA or SEP into a ROTH this year, the assets must leave the ROTH IRA by December 31. If your accountant believes that you’ll be paying lower income taxes this year as opposed to next year, then any ROTH conversions executed this year would generate lower taxes on the amount rather than if converted next year.
Get the most from your accumulated IRAs- discover and utilize available options at myrealestateira.com.