The end of 2014 is upon us, and if you haven’t taken care of any of the following yet, now is a good time to do so:
• Required Minimum Distributions (RMDs)
• IRA Contributions/Funding
• End of the Year Gifting
Required Minimum Distributions (RMDs)
Once you hit the age of 70½, you must begin taking minimum distributions from your qualified
retirement accounts (Traditional, SEP, and SIMPLE IRAs and qualified employer plans) by
April 1 the following year and each subsequent year, per IRS regulations. The tax penalty for not doing so can be pretty severe. If you haven’t taken your RMD for this year, don’t forget to do so! This is straight from the IRS website:
What happens if a person does not take a RMD by the required deadline?
If an account owner fails to withdraw a RMD, fails to withdraw the full amount of the RMD, or fails to withdraw the RMD by the applicable deadline, the amount not withdrawn is taxed at 50%.
Have you maximized your 2014 IRA contributions? This page on the IRS website details your deduction limits for 2014 and 2015. Remember, Roth IRA contributions are NOT deductible.
Also, if you expect future tax rates to be higher, you may wish to review the possibility of converting some of your Traditional IRA funds to a Roth. Be sure to discuss any penalties, capital gains and/or tax implications with a tax professional.
End of the Year Gifting
Are you going to itemize deductions on your 2014 tax return? If so, you have a few more weeks to make charitable contributions. In addition to donating cash, you may also consider the option of donating appreciated assets in lieu of cash. You should discuss the impact this may have on their capital gains taxes and deduction amounts with a qualified tax professional.
(Posted December 11, 2014)