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IRA Rules Get Trickier

Saturday, July 21, 2012 - 9:21 AM
Uncle Sam is about to get a lot tougher on individual retirement account mistakes—and that could trip up investors who aren't careful.   The government lets millions of dollars in tax penalties on IRAs go uncollected each year—$286 million in 2006 and 2007 alone for missed withdrawals and contributions that break the rules.


[...] Another potential mistake associated with retirement accounts is that the rules for making withdrawals from inherited IRAs are different from those governing regular IRAs, and even some financial professionals don't know them.    Read more



4
pearlbrownpearlbrown1,356 posts since
Nov 2, 2010
Rep Points: 5,955
1. Saturday, July 21, 2012 - 10:35 AM
Interesting article but one point confuses me.  It states if the IRA is less than $100,000.00 you don't have to make a withdrawal??  What if you have more than one and one of them is under $100,000.00 but the others are more?  Does that mean the one with the $100,000.00 is exempt but you need to withdraw your RMD from others?  This makes no sense to me since they allow us to combine all IRAs and take the needed RMD from anyone we prefere.  How can they allow combined totals and then state we can eliminate adding the one with the lesser amount to it?  I noticed this is a new Bill so it may not have started yet.   I have been withdrawing money from certain IRAs for years which were under the $100,000.00.   I wonder where this will put us if we already were withdrawing from smaller accounts.  Can we eliminate those once the Bill is passed?

Pearl, or anyone who has a better understanding of these rules:  I would appreciate additional info because I thought I was up to date on RMD withdrawals and the rules.  The above info is new to me.  Thanks!
3
paoli2paoli21,140 posts since
Aug 10, 2011
Rep Points: 5,080
2. Saturday, July 21, 2012 - 11:42 AM
The bill has just been introduced.  Until it passes (if it passes), all existing rules apply.  If it passes, we should expect to see more details.
3
pearlbrownpearlbrown1,356 posts since
Nov 2, 2010
Rep Points: 5,955
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