To understand this change, I’ll give a little background. When a person dies, their income tax year ends on the day of their death, and a new taxpayer called an “estate” comes into being. For federal income tax purposes, the estate files a Form 1041. On Form 1041, the estate has to report any income […]
No RMDs in 2020
The 880-page Coronavirus Aid, Relief, and Economic Security (CARES) Act signed by the President on March 27, 2020, includes a number of measures designed to stimulate the economy. One provision allows retirees to forgo taking Required Minimum Distributions (RMDs) from IRAs or 401(k)-type plans for calendar year 2020. This isn’t the first time that they […]
PAYING FOR NURSING CARE – PROTECTING ASSETS
Contemplating a stay in a nursing home is certainly an unpleasant thought. On top of needing the care, you have the financial concern of having to pay the bill. Unless you have purchased private long-term care insurance, you may be faced with depleting the family’s resources in order to pay the nursing home costs. Once […]
THE SECURE ACT
It has been awhile since made a post, but this development deserves your immediate attention. As you may be aware, the Setting Every Community Up for Retirement Enhancement Act of 2019 commonly being called the SECURE Act was signed into law December 20, 2019 and the changes discussed in this email apply to those who […]
PENALTY-FREE IRA WITHDRAWALS
In another column on required IRA withdrawals, I looked at the tax rules that require the elderly to start drawing on the moneys in their individual retirement accounts (IRAs). Under those rules, there are stiff penalties if you fail to make withdrawals from your IRAs after you reach age 70.5. In this article, we’ll take […]
