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Seniors: Avoid Minimum Distribution Penalties On Your Retirement Account

November 30, 2018

 

As the calendar nears the last month of the year, be warned: If you're 70½ or older, do not forget to take your required minimum distribution.

 

Required minimum distribution is the amount you must withdraw from your pre-tax retirement accounts every year. That money is then added to your taxable income for the year.

But just like filing tax returns, many individuals procrastinate when it comes to checking this item off their annual to-do list. And if you forget, you could be hit with a 50 percent tax penalty on the amount of the distribution you should have taken.

 

If you still need to take your required minimum distribution for 2018, get started sooner rather than later to ensure you meet the Dec. 31 deadline. Starting your distribution request early will allow enough time to sell out of the security, have the sale settle in that account and let the cash free up.

 

Your distribution can ultimately be taken out of just one IRA or retirement account. But the distribution you take out needs to consider all of your accounts.

 

Still have questions? Contact us at inquiry@njcpaccounting.com.

 
 

 

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