The Slott Report | Ed Slott and Company, LLC

The Slott Report

Prohibited Transactions Can Come Back to Haunt You

Two individuals wanted to purchase a business together. They set up self-directed IRAs and a corporation to hold the business. The self-directed IRAs purchased the shares of the new company, which then purchased an ongoing business. The purchase of the business was partly funded with loans that were personally guaranteed by the two individuals.

Slott Report Mailbag: Am I "Over Qualified" to Convert My 401(k) to a Roth IRA?

This week's Slott Report Mailbag talks about Roth IRA conversions, how they are taxed and whether President Obama's budget proposals would cap Roth IRAs.

IRA Distribution Tables: Fact or Fiction

The IRA distribution tables can be confounding to the average retiree. What table should I be using? How do I calculate my RMD (required minimum distribution)? We look at several different scenarios and provide the facts and common misconceptions involving the IRA distribution tables.

Employer-Sponsored IRAs: A Retirement Plan with Unique Advantages

If a business owner is considering starting a retirement plan for himself and his employees, he may want to consider an employer-sponsored IRA. While employer-sponsored IRAs are not very well known, even to many tax pros and CPAs, they offer some unique advantages from other employer retirement plans.

Inherited IRA: When Do You Own It?

If you inherit the IRA of an individual who has a required distribution for the year, you – as the beneficiary – must take any remaining required minimum distribution (RMD). Here is a situation that deals with this issue. John and Sue were both 75 years old last year. They both took their RMDs for the year. John died early in December. Sue was his beneficiary. She rolled his IRA into her own IRA in January. The question was – “What is Sue’s RMD for this year?"

State Income Tax Consequences of an IRA Contribution

With no state income tax to worry about, Texas residents don't have to worry about the state tax impacts of making IRA contributions. Since there is no state income tax, a deduction for making an IRA contribution is irrelevant. Plus, when IRA distributions are made in the future, Texas residents will only owe federal income tax on those distributions (assuming the Texas' tax laws remain the same). If you happen to live in one of the other 43 states, figuring out the state income tax consequences of making an IRA contribution is likely to be a bit more taxing (pun definitely intended).

Taking the Year of Death IRA Minimum Distribution

If you are the beneficiary of a deceased IRA owner, you have to begin taking required minimum distributions (RMDs). In some cases, there is an RMD you must take in the year the IRA owner dies. The required beginning date (RBD) for the IRA owner to have started taking their RMD is April 1 after the year they turned age 70 ½. If the IRA owner died before their RBD, there is no year of death RMD that you need to take. However, if the IRA owner died after their RBD, there may be an RMD that you as their beneficiary have to take that year.Basically, when the IRA owner dies on or after that

Roth Conversions and the 2013 Taxes

A Roth conversion could cost you more in 2013. That's because of several new and/or increased taxes in play for this year. The top income tax bracket is 39.6% for individuals married filing jointly with taxable income in excess of $450,000. A large Roth conversion could easily push an individual into the highest income tax bracket. When adjusted gross income for our married couple exceeds $300,000, personal exemptions and itemized deductions begin to phase out. And, when modified adjusted gross income exceeds $250,000, net investment income for our married couple becomes subject to the 3.8% surtax. So you can see how a Roth conversion could cost an individual more in taxes this year.

Slott Report Mailbag: What Does the Pro-Rata Rule Take Into Account?

ed slott IRA and retirement planning questions
This week's Slott Report Mailbag includes questions on the always-complicated Roth IRA 5-year rules and the pro-rata rule. As you can see, this is just the tip of the iceberg when it comes to IRA planning rules.

3 Financial and Retirement Planning Keys As Your Wedding Nears

Ed Slott and Company IRA Technical Consultant Jeffrey Levine discusses 3 financial and retirement planning keys you should discuss with your impending spouse as your wedding nears. Jeffrey talked about these keys in the IRAtv YouTube video below.
 

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