Here are a few reminders about individual retirement arrangements (IRAs) that may be useful to know before the end of 2011.
If you have not retired, you may want to review the 2011 IRA contribution and deduction limits to ensure you are taking full advantage of the opportunity to save for your retirement. Remember, you can make 2011 IRA contributions until April 17, 2012.
If you have exceeded the 2011 IRA contribution limit, you may withdraw excess contributions from your account by the due date of your tax return (including extensions). Otherwise, you must pay a six percent tax each year on the excess amounts left in your account.
Required Minimum Distributions
If you are 70½ or older this year, you must take a 2011 Required Minimum Distribution (RMD) from your traditional IRA by December 31, 2011 (April 1, 2012, if you turned 70½ in 2011). You can calculate the amount of your RMD by using the RMD worksheets. You must calculate the RMD separately for each traditional IRA that you own, but can withdraw the total amount from one or more of the traditional IRAs. Remember that you face a fifty percent excise tax on any amount of a RMD that you fail to take on time. If you own only Roth IRAs, you don’t have to worry about RMDs because you are not required to take RMDs from Roth IRAs.
_____________________________________________________________________________________ NOTE TO EDITOR:
- IRA Resources
- Frequently asked Questions: IRAs
- Frequently asked Questions: Required Minimum Distributions
- Publication 590 , – explain various RMD rules and requirements. – explain various IRA rules and requirements. – information for IRA owners including contribution and deduction limits, required minimum distribution worksheets, types of distributions, rollovers and more.
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