Whatever your required distribution, always check what the tax withholding is. "Come tax time you may owe a lot," says Kevin Martin, manager of theTax Institute at H&R Block. "By default, it's usually 10% withholding. Depending on the size of your accounts, that may not be enough. So...
Let’s say you and your spouse both face distributions, and you decide to simply take the entire combined amount of those RMDs out of your spouse’s IRA. Taking your RMD from your spouse’s IRA leads to a host of tax consequences, none of them good. In the eyes of the IRS, you’v...
SAVVY SENIOR ; Required IRA and 401(k) Withdrawal RulesDear Savvy Senior,Can you give me the details on required IRA and 401(k)distributions? I turned...Miller, Jim
These rules effectively eliminate thestretch IRA, an estate planning strategy that some beneficiaries of inherited IRAs had used in the past to extend the tax-deferred benefits of an IRA.1 If you have multiple IRAs, you may aggregate the RMD amounts for each of them and then withdraw the to...
In this case, the transfer would be from a tax-deferred account to a taxable account. An in-kind transfer lets you meet your minimum requirement and still stay invested. One downside is that taxes will still be owed, including withholding taxes at the time of the withdrawal, unless you ...
Tip: Many people choose to have taxes withheld from their RMDs, as it is counted as ordinary income. If you choose not to do this, make sure you set aside money to pay the estimated taxes throughout the year. And be careful—sometimes underwithholding can result in a tax penalty. 2. ...
Inherited IRAs:Pre-tax retirement accounts left to you by deceased loved ones also come with required annual distributions. You’ll likely roll the account into aninherited IRA, which has a complex set of rules for distribution based upon your relationship to the original owner. Inherited IRAs ha...