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Taxpayers and Retirees: Heed These Deadlines To Avoid Pitfalls
Posted By Carole Fleck On August 21, 2012 @ 10:44 am In Money Talk | Comments Disabled
I’m betting that no one wants to pay more taxes than they must or be penalized for not following IRS rules. So as summer winds down, there are a few deadlines looming that taxpayers - and retirees in particular - will want to know about:
Here’s another important tip: Don’t combine that inherited IRA with one you already have. Open a separate new account for the inherited IRA, says Peter D’Arruda, president of Capital Financial Advisory Group in Cary, N.C., and host of the weekly radio show, Financial Safari. When you do, he says, you can stretch the withdrawals of that account over your lifetime so that the rest of the funds can grow tax-deferred. If you’ve already combined the two, however, the action cannot be reversed. “There’s no forgiveness by the IRS for that,” he says.
To calculate your RMD, you take the account balance on Dec. 31 of the previous year and divide it by the number of years left in your life expectancy (based on the IRS’ “Uniform Lifetime” table).
Article printed from AARP: http://blog.aarp.org
URL to article: http://blog.aarp.org/2012/08/21/taxpayers-and-retirees-heed-these-deadlines-to-avoid-pitfalls/
URLs in this post:
 Image: http://aarpblog.files.wordpress.com/2012/08/tax-return.jpg
 taxpayers - and retirees in particular : http://www.aarp.org/money/taxes/aarp_taxaide/
 retirement account: http://blog.aarp.org/2012/08/17/dreaming-of-an-easy-retirement-calculators-can-help-get-you-there/
 make the required withdrawal: http://www.aarp.org/work/retirement-planning/required_minimuum_distribution_calculator/
 take out their RMDs: http://blog.aarp.org/tag/required-minimum-distributions/
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