Individuals who turned 70 1/2 in 2016, but opted to wait until 2017 to begin taking their RMD for 2016 must receive their 2016 RMD by 4/1/17, even though that date falls on a Saturday. IRS Pub. 590-B, Distributions from Individual Retirement Arrangements (IRAs), does not offer an alternative date, such as the following Monday, 4/3/17, to receive the distribution, so please keep that in mind. If you have any questions, please contact your Linkenheimer CPA.
Individuals who attained age 70 1/2 in 2015 must begin taking Required Minimum Distributions (RMDs) from their traditional IRAs by 4/1/16. Qualified retirement plan participants (e.g., 401(k) participants) also must begin taking RMDs if they reached age 70 1/2 or retired in 2015, whichever came later (except for 5% owners, who are subject to the IRA rules). Note that a qualified plan may require all employees (including non-5% owners) to take RMDs by April 1 of the year following the year the employee attains age 70 1/2. If you have any questions about the deadlines or RMDs, please contact your Linkenheimer CPA.
Eligible taxpayers have until Wednesday, 12/31/14, to make Qualified Charitable Distributions (QCDs) from their IRAs. QCDs of up to $100,000 per year from IRAs are available to taxpayers who are age 70.5 or older. QCDs are not taxable, and they can be can’t be deducted as a charitable contribution. However, they can be counted as 2014 Required Minimum Distributions (RMDs) if made by the 12/31/14 deadline. Although this break was set to expire on 12/31/13, it was extended through 2014 by the recently enacted TIPA (Tax Increase Prevention Act).
Written by Mike Musson, CPA, Partner
The market has generally been up since 2013, but if the value of your IRA has declined since your 2013 conversion date, or if your cash situation has changed significantly since you decided to convert, you can “recharacterize” the conversion transaction and avoid the tax. Generally speaking, you can unwind the conversion with a trustee-to-trustee transfer from the Roth back to a traditional IRA no later than 10/15/14. If you have already filed your 2013 return, you will need to amend.
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