The Slott Report | Ed Slott and Company, LLC

The Slott Report

Roth IRA Contribution Income Requirements, SEP IRA Restrictions Highlight Mailbag

This week's Slott Report Mailbag includes questions (and our answers) on the income requirements for a Roth IRA contribution, SEP IRAs and governmental 457(b) plans. As always, we stress the importance of working with a competent, educated financial advisor to keep your retirement nest egg safe and secure. Find one in your area at this link.1.

Is a monthly retirement check considered income in order to open a Roth IRA? 

Answer:An IRA contribution must be based on the taxable compensation of the individual for the year of the contribution. Pension, profit sharing or IRA distributions are not considered compensation for the purpose of a contribution to an IRA.

12 Things You Can't Do With Your Retirement Account

Can you believe that we are already in May? And in 2012 no less? In the spirit, somehow fast forwarding into the future and being in May of 2012, here are 12 things you may not do with your retirement account.1) You may not convert or rollover a required minimum distribution (RMD). A year’s RMD must be taken prior to making any such transaction.2) You may not claim “hardship” as an exception to the 10% early distribution penalty. No such exception exists!!3) You may not name your estate as your IRA beneficiary if you want your beneficiaries to stretch your IRA. 4) You may not make a Roth contribution for 2012 if your income is above certain thresholds. Click here to see those thresholds.5) You

Video: Tax-Saving Strategies to Implement; Tax Laws to Keep an Eye On

Tax-saving strategies should be on the tip of every financial advisor's tongue throughout 2012. In this video roundtable, we discuss life insurance, annuities (more specifically QLACs), Roth IRA conversions as well as higher taxes (namely the 2013 health care surtax) coming in 2013.  Share this video with your clients, your friends and your family so they know what tax-saving strategies to implement and what tax laws to keep an eye on this year.2014 Retirement Guide Helps You

60-Day IRA Rollovers - How to Count the 60 Days

An IRA rollover is when you take money out of your IRA or Roth IRA and the distribution is payable to you. You can put the funds in your bank account, spend them, invest them, do anything you want with them. Then, within 60 days, you can put all or part of the amount distributed back into your IRA or Roth IRA. There will be no tax or penalty on this transaction.But how do you know when the 60 days are up? You do NOT start counting from the date you request the distribution, the date on the check, or the date the funds left the IRA account. You start counting on the date you receive the funds if they are mailed,

Spousal Beneficiaries, Inherited IRAs and RMD Questions Highlight Mailbag

This week's Slott Report Mailbag answers questions about spousal beneficiaries, inherited IRAs and keeping the Stretch IRA provision (biggest benefit in the tax code!) for your heirs and required minimum distributions.  As always, we stress the importance of working with a competent, educated financial advisor to keep your retirement nest egg safe and secure. Find one in your area at this link.1.Ed:I have your book, but unfortunately it is at my cabin so I don't have access right now. I am inheriting a Roth IRA from my wife, who recently passed away at 65. It was converted to a Roth in December 2008. First question: Is it better to keep it as a separate Roth IRA, or add it into my existing Roth IRA?

Statistics of Income Bulletin

The IRS has released the winter 2012 issue of the Statistics of Income (SOI) Bulletin. The SOI Bulletin is produced on a quarterly basis and provides the most recent data available from various returns filed by U. S. taxpayers. This latest SOI Bulletin includes data on personal wealth in the U. S. for 2007 and information from individual income tax returns filed for 2009. Information related to several other categories is also provided.

RMDs for Roth IRAs, Trustee-to-Trustee Transfers Highlight Mailbag

This week's Slott Report Mailbag includes questions on taking required minimum distributions from Roth IRAs (do you have to?), handling 401(k)s and Roth IRAs and using trustee-to-trustee transfers to set you up for retirement.

Reporting Lump-Sum Distributions

Recently, we wrote about potential tax advantages available to individuals who receive lump sum distributions from employer-sponsored qualified retirement plans. Both articles confirmed that to qualify for either one of these provisions a lump-sum distribution must be received in one taxable year. This has prompted many questions on how lump-sum distributions are reported and taxed on an individual’s income tax return.

Morningstar Videos: Ed Slott on Last Minute IRA Tax Tips

Ed Slott spoke with Morningstar's Christine Benz earlier this week about last-minute IRA tax tips, including choosing between a traditional IRA and Roth IRA contribution, the backdoor Roth IRA and Roth recharacterizations. The videos can be found below in their entirety. Ed Slott speaks about choosing between a traditional IRA and Roth IRA contribution in this video.

Final Tax Time Tip: Triple Check Contributions and Forms 1099-R and 5498

Most tax returns are done, 1099-Rs have been received, 2011 contributions have been made, and 5498s will be out by the end of next month (May). What's left to be done? Only the double (and triple) checking. Did you make a contribution in 2012 for 2011? Double check now to be sure the IRA custodian coded it as a 2011 contribution. Also double check that it went into the correct account, IRA or Roth IRA, your account or your spouse’s account, IRA or non-IRA account. Now is the time to fix any mistakes, not next year.

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