Hubble Highlights Qualified Charitable Distributions in CNBC ArticleSubmitted by Radix Financial on August 22nd, 2016
Read the full article here: Older boomers face IRA withdrawals or a 50% tax
As we move into the fall, it's time to start thinking about Required Minimum Distributions (RMDs) from IRAs. A few things to keep in mind:
1) This only applies to traditional IRAs. Roth IRAs are not subject to RMDs.
2) The IRS requires you to begin taking distributions in the year you turn 70 1/2. Because "70" would be too easy.
3) You can always take distributions from an IRA (Roth and Traditional), penalty free after you turn 59 1/2.
4) There is a grace period for your first RMD, and is required to be taken by April 1st of the year FOLLOWING the year you turned 70 1/2, all subsequent years by December 31. But, be careful, if you wait until the April deadline, you will be required to take two that year increasing your taxable income. Again, nothing is ever easy with these things.
5) For those who are already giving to charity, RMDs can be donated directly to charity without recognizing income tax.
6) This one is important: DO NOT FORGET! RMDs not taken by 12/31 is subject to a painful 50% tax penalty on amounts not taken. The amount you are required to take can be calculated by dividing your balance on 12/31 of the previous year by your life expectancy.
Radix Financial will always help you calculate and distribute RMDs correctly; and we will never let you forget.