Whether you put away too much money in your IRA or you forgot that mandatory withdrawal in 2018, your CPA will unearth your mistakes come tax season. Here's what you should know.
Tax season is prime time for catching and fixing last year's individual retirement account slip-ups. Whether you put away too much money in your IRA or you forgot to take out a required minimum distribution — ie, a mandatory withdrawal — after you turned 70½, your accountant is likely to discover your mistakes. "Missed RMDs are often caught now, while you're working with your tax preparer," said Tim Steffen, CPA and director of advanced planning at Robert W.
First, take the missed RMD as soon as soon as possible. As you prepare your taxes, file Form 5329, which spells out the so-called"excess accumulations tax" or the penalty that applies to missed distributions. Finally, attach a letter of explanation, telling the IRS that you made up the missed distribution and explaining why you failed to take the withdrawal last year, said Ed Slott, CPA and founder of Ed Slott and Co.
For instance, maybe you saved $5,500 in your IRA last year, forgot about it and made another contribution just prior to filing your taxes this spring. Indeed, Jan. 1 through April 15 is a period when savers can put money in an IRA and have it count for either 2018 or 2019. Or maybe you've been contributing to a Roth IRA, but last year you had a raise. As a result, your modified adjusted gross income went over $120,000 if single or $189,000 if married and filing jointly.
Malaysia Latest News, Malaysia Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
How the new tax law created a ‘perfect storm’ for Roth IRA conversions in 2019Today’s federal income tax rates might be the lowest you’ll see for the rest of your life.
Read more »
As India bombs Pakistan for the first time in almost 50 years, the possibility of another war loomsIt is the first time that military aircraft has traversed the boundary since the last of three wars between the two countries ended in 1971. There are concerns that this could be the beginning of a fourth.
Read more »
Number of hate groups reaches all-time high, report saysHate groups have increased by 30% in the past 4 years, reaching an all-time high, according to a report released by the Southern Poverty Law Center.
Read more »
This stock-market gauge just hit an all-time high — and that’s bad news for bearsOne widely used signal of the health of the stock market has hit an all-time high, setting the stage for a potentially further rally in U.S. equity benchmarks, say technical analyst.
Read more »
Is It Time for a Better Hospital I.D. Bracelet?Hospitals are souping up patient ID wristbands with smart technology—and testing substitutes that get rid of the bracelet entirely.
Read more »