Have You Taken Your RMD This Year?
Time is running out. If you are 70 1/2 or older, and you own traditional IRA's 401k's, 403b's, SEP's or other qualified retirement accounts, you must take the Required Minimum Distribution(RMD) before December 31st this year. Failure to do so will result in a 50% penalty for not taking the required amount.
I get asked often about "What if I don't need the money?" "What if I don't want to take the RMD?" The answer is it does not matter. The Federal Government requires you to take the money out and pay taxes on the amount. That is their way of getting their portion of the taxes that you have postponed paying while you were accumulating the retirement accounts. Now they require the distribution phase to be turned on so the IRS can collect taxes. No one thinks that the IRS owns at least a 1/3 of your retirement accounts - and for some, it is even higher.
I also get asked, "Is there a way to get around RMD's?" The answer is - yes. By converting money from a traditional to a Roth, you can avoid paying taxes on money you do not need and don't want to take. Yes, you pay taxes on it now, but you move a little each year and before long, you have more in the" already taxed account" and less in the "will be taxed in the future accounts".
Taxes are going up. There is no way around it. Why not pay the taxes while they are "on sale" rather than later when they go up. Our country's debt is tremendous and the only way to pay it is to raise taxes or borrow money. Our borrowing capacity is almost at its limit so that leaves only taxes as the way to increase revenues. (or reduce spending but that does not seem to be working in Congress).
So, come meet with us today and let us show you how you can save hundreds or thousands of dollars in taxes by paying them today while the taxes are lower.
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