One of the first rules of year end retirement planning is to make sure you maximize your contributions each year to your 401k, 403b, or IRAs. If you do have an IRA and are currently over the age of 70½, you need to make sure you take your required minimum distribution before December 31st of this year. If you are approaching age 70½ and would like to consider what impact required minimum distributions would have on your tax situation, you need to contact your tax advisor.
If you’re over age 70½, the tax law has allowed you in the past few years to donate a portion of your required minimum distribution directly to charity and not recognize the income on that distribution. That law has not yet been extended for 2015 but it is believed likely to be extended by the end of the year; but stay tuned (currently legislation in Congress makes this option permanent). And, if for some reason they do not extend that provision, you can still take a charitable contribution deduction for that amount contributed to the charity if you itemize your deductions.
Remember every tax situation is different – if you have any questions please contact us or your tax advisor.
Recently, Appleton Group LLC partnered with our Firm, Remley & Sensenbrenner, to produce a brief informational video on a powerful estate planning tool called a Charitable Remainder Trust (CRT). A CRT can help you accomplish three goals: provide lifetime income for you and your family, control taxes now and fund your favorite charities at the end of the trust. Check out the video below…