What the Trump Tax Plan Means for Your Retirement
On April 26, 2017, the Trump administration released its highly-anticipated tax reform plan. The administration said the goals of the plan include growing the economy, creating jobs and simplifying the tax code. The changes proposed are significant and if passed (and that is a big if) could have a major impact on your retirement planning.
Did You Have a Loss of Funds in an IRA Thanks to Your Broker’s Illegal Transactions? This Week’s Q&A
This week's Slott Report Mailbag looks into inherited IRAs, RMDs, illegal trades, and PLRs. As always, we recommend you work with a competent, educated financial advisor to keep your retirement nest egg safe and secure.
My sister died at age 77. She left me as the [...]
So You Think You Need to Name a Trust as the Beneficiary of Your IRA
In two weeks I had three trusts come across my desk that were named as the beneficiary of the account owner’s IRA. The account owner had now died and the universal question was, “Now what?”
The first trust was a Colorado trust. In all fairness, the attorney most likely advised the client not to name this trust as the [...]
7 Things You Need to Know About the Once-Per-Year Rollover Rule
In 2014, the Tax Court in the Bobrow case ruled that the once-per-year rollover rule applies to all of an individual’s IRAs, not to each of their IRA accounts separately. The Court’s surprising ruling conflicted with a long-standing IRS position in earlier editions of IRS Publication 590 and in private letter rulings. Several [...]
If You're Over 70 1/2 Years Old and Still Working You Need to Know This
This week's Slott Report Mailbag looks into still working exceptions, RMDs, and IRA transfers. As always, we recommend you work with a competent, educated financial advisor to keep your retirement nest egg safe and secure.
Here’s a question I have not found an answer for.
When a worker over the age [...]
How to Increase Your Chances of Audit to 100%
Congratulations! You’ve made it through yet another tax season. By now, you should have either filed your return or an extension. If you did the former, and actually filed your return, a three-year statute of limitations clock has begun to tick. This three-year period is generally the amount of time that the IRS has to examine your return via an [...]
Interesting Use of the QCD Strategy
Qualified Charitable Distributions (QCDs) are now a permanent part of the tax code. They allow individuals who are at least 70 ½ years old at the time of the transfer to directly transfer IRA funds to a qualifying charity. The individual gets no charitable deduction for these contributed funds, but, they do not have to include the funds in income. It is as if [...]
What Victims of Casualty Theft Need to Know: This Week’s Q&A
This week's Slott Report Mailbag looks into Casualty Theft, IRS rules, Medicare, and Roth conversions.As always, we recommend you work with a competent, educated financial advisor to keep your retirement nest egg safe and secure.
Hello. It has been some time since I’ve reached out to Ed Slott and your website[...]
Last Minute IRA Contribution Advice
The 2016 tax-filing deadline is upon us. Are you considering making a 2016 IRA contribution? It’s not too late, but time is quickly running out. Here are some quick words of last minute advice to keep in mind as you make your contribution.
1. Don’t Miss the Deadline. The deadline for making your 2016 IRA contribution is the tax-filing deadline, [...]
Sometimes It Pays to Treat Your Kids Unequally
As the father of more than one child, I understand the desire to try and treat children as equally as possible. You certainly don’t want one child to think you love him/her any less, or more, than your other children (though children will inevitably feel that way at one time or another), and you want the best for all of your children. But while [...]
The Consequences of Breaking Rollover Rules
This week's Slott Report Mailbag looks into IRA rollovers, IRA transfers, and back-door Roth IRAs. As always, we recommend you work with a competent, educated financial advisor to keep your retirement nest egg safe and secure.
I made the mistake of moving more than one IRA account as a roll over and not a direct transfer as I was [...]
An IRA Rollover Quiz
Most people think it is easy to move their retirement assets. But is it? The following is a quick quiz. How many of these rollover questions can you get correct? The answers are at the end of the quiz.
You are moving funds out of your employer plan to your IRA. The funds are going directly to your IRA. Is this a rollover?
You are moving funds out of your employer [...]
The Ultimate Rainy Day Fund; The Roth IRA
A recent Pew Charitable Trusts study released in March came to the scary conclusion that roughly one-third of Americans would have trouble coming up with $2,000 in the event of an emergency. Clearly, this is a problem. Try as one might, emergencies are bound to happen from time to time. Some of them may not have an impact on your finances, but many [...]
This Week's Q&A: Converting a Pre-Tax IRA to a Roth and More
This week's Slott Report Mailbag looks into converting and contributing to different IRAs, 401(k)s, and RMDs. As always, we recommend you work with a competent, educated financial advisor to keep your retirement nest egg safe and secure. You can find one in your area here.
Three part question:
In December [...]
Roth IRA Recharacterizations: 11 Things You Need to Know at Tax Time
1. It is not too late to recharacterize a Roth IRA conversion done in 2016.
2. Only funds actually distributed from an IRA or employer plan in 2016 will count as a 2016 Roth conversion.
3. A recharacterization of a 2016 Roth IRA conversion can be done up to October 16th, 2017 even if you have already filed your 2016 income[...]
What You Should Know Before You Name an HSA Beneficiary
If you have an HSA, you will want to give some thought to what will happen to this account after your death. The rules are a little tricky and careful planning is important to minimize the tax bite.
You should name a beneficiary for your HSA, just as you would for your IRA or company retirement plan. After your death,[...]
Don't Lose Out on Claiming a Loss: This Week's Q&A
This week's Slott Report Mailbag looks into claiming a loss in a traditional IRA, and 403(b) transfers. As always, we recommend you work with a competent, educated financial advisor to keep your retirement nest egg safe and secure.
I receive your emails relating to IRAs. I have a question regarding claiming a loss in a [...]
Is a Trusteed IRA Right for You?
Trusteed IRAs have been in the news recently. More and more financial organization are making these products available. Is a trusteed IRA a good strategy for you? Here is what you need to know about this increasingly popular option.
An Important Decision
When you have an IRA, at some point you must think about what you want to happen to your funds after your[...]
Strategies to Make the Most of Your Retirement Assets
“Confidence comes from being prepared.” —John Wooden
A successful retirement plan does not happen overnight nor can it exist without proper preparation.
A client once asked me, “How can we properly prepare for retirement if we do not know what the rules will look like when we retiree?” This was a very valid question[...]
7 IRA Questions to Ask Before You File Your Return
1) Did you make a deductible IRA contribution for 2016?
If yes, make sure the deduction is reflected on line 32 of your Form 1040.
2) Did you make a non-deductible IRA contribution for 2016?
If yes, make sure the contribution is reported on Form 8606. The contribution will not, however, be reported anywhere on your Form 1040. If you [...]
Mailbag Q&A: Early Distributions, Back-door Roth Conversions and More
This week's Slott Report Mailbag looks into early distributions, back-door Roth conversions, and Roth IRAs. As always, we recommend you work with a competent, educated financial advisor to keep your retirement nest egg safe and secure.
A tax payer lost his job in March. If he took an early distribution [...]
Things to Tell Your Tax Preparer During Tax Season
Any time you get a 1099-R for a retirement plan transaction, make sure you give it to your tax preparer. The IRS gets copies of your 1099-Rs, so they need to be included on your income tax return. They cannot be ignored, even if they are for a non-taxable transaction. How will your tax preparer know it is a non-taxable transaction? You have to [...]
How Cupid’s Arrow May Save Your Retirement Plan
Over $23 trillion sits in various types of retirement accounts across America, according to the Employee Benefit Research Institute. Even that figure may be low.
Since 2011 when that figure was calculated, markets have increased and retirement savers have contributed even more to their plans, adding thousands of dollars to the average [...]
6 Tips for Making Your 2016 Roth IRA Contribution
Tax season is well underway. This is the time when you may be considering contributing to a retirement account. You may be interested in the Roth IRA, which offers the promise of tax-free withdrawals in retirement if you follow the rules. If you are deciding whether a 2016 Roth IRA contribution is the right move for you, here are 6 tips to keep in[...]
Can You Really Transfer That Penalty Free? This Week's Q&A
This week's Slott Report Mailbag looks into IRA transfers and international transfers. As always, we recommend you work with a competent, educated financial advisor to keep your retirement nest egg safe and secure.
Hello. I am a 55 year old, single, self-employed woman with $4,700 in a traditional IRA that I am not[...]
Do You Have to File an Amended Return?
If you’re like most people, you’ve probably wondered at some point, “Do I need to file an amended return for that?” It is in that spirit that we offer you seven common errors and whether or not you should file an amended return after you discover them.
Issue #1 – You forgot to take a required minimum distribution last year.
Should you file an[...]
QCD – Tell Your CPA About It
Did you or your client do a QCD (Qualified Charitable Distribution) last year? Make sure the tax preparer knows about it.
The IRA custodian is not required to report a QCD transaction on Form 1099-R. Instead, it will show up as a regular distribution to the IRA owner. A regular distribution is normally a taxable event. A tax preparer, especially at this time of [...]
There’s No Place Like Home: Unlocking the Door to Greater Retirement Income
Running out of money while there is still much life to live is frightening. The specific concern is that retirees might spend down their assets at a faster pace than their investment gains accrue. Financial advisors are commonly tasked with helping clients determine if, and under which circumstances, they will have [...]
After Death, Don't Leave Your Loved Ones This Headache
This week's Slott Report Mailbag looks into beneficiaries, inherited IRAs, RMDs and annuities. As always, we recommend you work with a competent, educated financial advisor to keep your retirement nest egg safe and secure.
A spouse inherits a Savings and Investment Plan from her husband at his death. She fails to name her[...]
If IRAs Had Oscars…
Announcer: And the award for Best Type of Account to Help John Doe in Retirement goes to…
…the Roth IRA!
Roth IRA: I… I… I don’t know what to say. I mean this is all so unexpected. I’d like to thank John Doe for believing in me when no one else would. I mean, he had CPAs tell him that he was crazy. He had friends tell him that he was crazy. He had [...]
IRS OKs Spousal Rollover. . . with a Twist
In recent Private Letter Ruling (PLR 201706004) the IRS allowed a widow to do a spousal rollover, but with an interesting twist that also ruled the five-year rule applied because the IRA had no designated beneficiary.
The story begins after the death of her husband, and the widow had a very unpleasant surprise. She was not named as [...]
Obstacles with IRA Contributions and RMDs: This weeks Q&A
This week's Slott Report Mailbag looks into spousal contributions, IRAs, the IRS guidelines, and RMDs. As always, we recommend you work with a competent, educated financial advisor to keep your retirement nest egg safe and secure.
I read your excellent post of December 07, 2015 titled “How a Stay-At-Home Spouse [...]
Conquer Your Fear of Tax Season
One of the most common questions asked during tax season is, “Do I have to file a tax return?” The answer, of course, is a bit complicated, but in general, if your income is equal to or greater than the sum of the standard deduction plus your personal exemption, you must file a return. The standard deduction is higher for those 65 or older, so age makes a [...]
Most people think it is easy to leave an IRA to their heirs. But is it? The following is a quick quiz. How many of these beneficiary questions can you get correct? The answers are at the end of the quiz.
1. The IRA owner has four children. He names the oldest child as the beneficiary of his IRA and the executor of his will which divides all his assets equally among the four children. Who gets [...]
You Missed a RMD! Now What? This weeks Q&A
This week's Slott Report Mailbag looks into missed RMDs, IRA transfers, and Testamentary Trusts. As always, we recommend you work with a competent, educated financial advisor to keep your retirement nest egg safe and secure.
I am sure you can help me with this situation.
A person died on November 29, 2015. His Roth IRA was [...]
Sometimes the Score at Halftime DOES Matter
On Sunday night we were treated to the first ever overtime in Superbowl history. It was a great game (with a lousy outcome – sorry, not a Pats fan). Of course, what most people will remember is that the Patriots finished off what may be the greatest comeback in sports history (that hurts to say), and that it was only the score at the end of the game [...]
5 Things Every Roth IRA Owner Should Know Before Taking a Distribution
Are you one of the growing number of savers who has a Roth IRA? If so, there will come a time when you will want to take funds from your account. Here are 5 things that every Roth IRA owner should know before taking a distribution.
1. Your Roth IRAs are treated as one account.Things can get a little tricky if you have more[...]
Did you Inherit an IRA? Don't Inherit a Mess. This weeks Q&A Mailbag.
This week's Slott Report Mailbag looks into inherited IRAs, beneficiaries, and backdoor Roth IRA strategies. As always, we recommend you work with a competent, educated financial advisor to keep your retirement nest egg safe and secure.
My client just inherited an inherited IRA from her spouse, who [...]
What Happens When Beneficiaries do Not Split the Inherited IRA?
Generally, the goal when naming IRA beneficiaries is that they will stretch out their distributions on the inherited IRA for as long as possible. The tax code and regulations currently support this goal by stating that the stretch option is the default option. But, of course, there are certain rules that must be followed. The IRA [...]
Why You May Reconsider Naming Your Trust as Your IRA Beneficiary
IRAs have been around for decades. You may have had your IRA for years. Maybe many years ago, when you established your IRA, you named a trust as the beneficiary and haven’t thought a lot about it since. You likely spent both time and money drafting the trust and were careful to name the trust on your IRA beneficiary form. Here [...]
Imperative Q&A's involving Transfers, Rollovers, and Beneficiaries
This week's Slott Report Mailbag looks into indirect and direct transfers, 60-day rollovers, trusts as a beneficiary, and 403(b)'s. As always, we recommend you work with a competent, educated financial advisor to keep your retirement nest egg safe and secure.
I am a public TV subscriber and [...]
Yes, You Actually CAN Do That
Last week my Slott Report article created something of a firestorm in my email inbox. Shortly after it was posted I began to receive a litany of emails, all written very respectfully, but all of which said my post was incorrect and that revisions were necessary in order to avoid Slott Report readers from making errors with respect to their planning.
To recap the [...]
HSAs Are NOT the Answer to America’s Health Insurance Problems
In my opinion, expanding the availability of HSAs to more Americans is not going to solve the problem of providing health insurance to all Americans. Here is why I believe that statement.
IRA accounts were established by ERISA in 1974. Today, anyone with earned income can contribute up to $5,500 a year, $6,500 a year if you are [...]
Over 59 1/2? You Must Know these Roth IRA and 401K Answers
This week's Slott Report Mailbag looks into Roth IRAs, 401Ks, contributions, tax-free options, and more. As always, we recommend you work with a competent, educated financial advisor to keep your retirement nest egg safe and secure.
My wife is a self-employed Dental Hygienist who does fill-in work for Dentists, so has no[...]
Avoid This Costly Mistake At Death
It’s not exactly a fun thing to think about, but death is an absolute inevitability. When that time comes or more aptly, sometime before that time comes, there are a number of planning strategies that you can implement to make sure that you preserve tax benefits and minimize present and future income taxes for your heirs. One such planning opportunity may [...]
Need to Withdraw From an IRA Before Turning 70 1/2 Years Old? This Weeks Q&A Mailbag and More.
This week's Slott Report Mailbag looks into RMDs, QCDs, and IRA withdrawals prior to turning 70 1/2 years old. As always, we recommend you work with a competent, educated financial advisor to keep your retirement nest egg safe and secure.
Question: Hello. I am wondering if you could answer[...]
What's New and How Does it Impact You? Retirement Plan Contribution Limits for 2017.
There were few changes to the retirement contribution limits for 2017.
IRA and Roth IRA limits remain the same. The maximum an individual with earned income can contribute is $5,500 split any way they want between traditional and Roth IRAs. An individual age 50 or older during the year can contribute an [...]
7 Resolutions for Your IRA for 2017
A new year brings a fresh start and a chance to do things better. You probably have a few resolutions for 2017. You may be planning to eat healthier, get more exercise, or stick to a budget. As you are making your resolutions for the new year, don’t overlook your IRA. Here are a few suggestions for 2017.
1. Don’t Wait. Thinking about making an IRA [...]
When You're 70 1/2 Avoid These Disastrous Mistakes
This week's Slott Report Mailbag looks into RMDs, Roth IRAs, and "still working" provisions. As always, we recommend you work with a competent, educated financial advisor to keep your retirement nest egg safe and secure.
Good afternoon! We have a client who said he saw a special of yours on PBS, and his understanding was [...]
Death is inevitable. It comes for us all at one point or another. Some sooner than later, but none are able to escape its grasp. Whenever that time comes, your “stuff,” including your financial assets, generally live on, and are still essentially yours until they are legally transferred to another person or entity. That transference of assets can occur in any number of ways, but often includes[...]
This week's Slott Report Mailbag looks into international beneficiary IRAs, tax free IRA withdrawals, and inherited IRAs. As always, we recommend you work with a competent, educated financial advisor to keep your retirement nest egg safe and secure.
Question: I have a question pertaining to if a IRA owner has taken part of their RMD but then dies before year end…..does that remainder [...]
Question: When is the last day to make a 2016 Roth IRA conversion?
Answer: In order for a Roth IRA conversion to be considered a 2016 Roth conversion, the money must leave the distributing account by December 31, 2016. So if a distribution is made from a traditional IRA on December 31, 2016 and it doesn’t get into the Roth IRA until February 15, 2017, it’s still a 2016 Roth IRA conversion.[...]
As 2016 draws to a close, and we get ready to ring in the new year, it’s a great time to look back. Here is a roundup of six of the big stories in the world of retirement accounts for 2016.
1.Qualified Charitable Distributions Become Permanent
Qualified charitable distributions (QCDs) made headlines when Congress brought them back from the dead in late 2015. A QCD allows an IRA owner or [...]
This week’s Slott Report Mailbag looks into Inherited IRAs, Defined Contribution Profit Sharing Plans, and Roth 401K rollovers. As always, we recommend you work with a competent, educated financial advisor to keep your retirement nest egg safe and secure.
Question: I have a somewhat complex situation. Cliff notes below:
A 401k participant is 28 years old. He dies inSeptember [...]
H – Have your financial institutions send you a copy of the beneficiary information they have on file for you. On more than a few occasions, we’ve seen financial institutions lose copies of beneficiary forms (or in some really egregious cases, destroy them). Asking for this information annually helps ensure that there are no surprises when you’re no longer here. The beneficiary form is the [...]