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By Paul D. Brick, CFP®
Stambaugh Ness Financial Strategies

The IRS can charge an excise tax of up to 50 percent if you don't take the required minimum distribution from your IRA account by April 1 of the year after the year you turn 70.

In other words, if you turn 70 1/2 in 2007, you need to take the required minimum distribution by April 1, 2008. Even if you start taking distributions earlier, once you turn 70 1/2, you need to make sure that the distributions for that year and future years meet the IRS minimum requirements.

The minimum distribution is based on the account balance divided by remaining life expectancy or by the applicable distribution period. This amount needs to be recalculated every year to reflect changes in the account balance (for example, rising or falling stock or bond prices).

With the potential of a 50 percent penalty, a mistake in calculating your minimum distribution can be costly. Financial Planner Paul Brick, CFP® can help make sure that your IRA works for you - not for the government. You can reach Paul at 717-757-6999 or 800-745-8233 or send him an email by using the form below.


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Our firm provides the information in this e-newsletter for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. Tax articles in this e-newsletter are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided "as is," with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.

IRS Circular 230 Notice: To ensure compliance with requirements imposed by the IRS, we inform you that any US tax advice contained in this communication is not intended or written to be used, and cannot be used, for the purpose of avoiding penalties under the Internal Revenue Code.

Securities and advisory services offered through Geneos Wealth Management, Inc. Member FINRA/SIPC. Geneos Wealth Management, Inc is not affiliated with Stambaugh Ness.