As we approach the end of the year, we would like to remind you of a few important tax/retirement plan related deadlines. Custodians do not guarantee processing after December 15, so we recommend avoiding last minute requests.
Required Minimum Distributions
For those individuals who have Required Minimum Distributions (RMDs) from retirement accounts, it is your responsibility to ensure that these distributions are completed prior to year-end. This includes IRA owners aged 73 and older, as well as beneficiary IRA holders of any age. Failure to take your RMD prior to year-end may result in tax penalties.
Qualified Charitable Distributions
Qualified Charitable Distributions (QCDs) allow you to make charitable gifts directly from your IRA to a qualified charity to help satisfy your RMD. The amount donated via a QCD is an above-the-line deduction that lowers a tax filer’s adjusted gross income.
Important Note to Realize Tax Benefits:
• The Form 1099-R will NOT make any mention of your QCDs.
• To realize the tax benefits, it is crucial that the strategy is reported accurately on your tax return.
• It is your responsibility to tell your tax preparer the portion of your total IRA distributions that were QCDs. They will then mark the appropriate amount as non-taxable on your return.
Gifts to Donor Advised Funds
If you are planning to make gifts of securities or cash to a Donor Advised Fund, this must be completed by December 31st to receive credit for the charitable gift for the current tax year.
Roth IRA Conversions
If you plan to convert assets to a Roth IRA for the current year, you must do so by December 31st. This deadline is crucial, as conversions completed after this date will be accounted for in the following year's tax return, potentially affecting your financial planning and tax strategies.
Retirement Account Savings Before Year-End
IRA contributions (Traditional/Roth/SEP) can be made for the current year up until April 15th (or the tax filing deadline) in the subsequent year.
For certain employer sponsored retirement plans (e.g. Solo 401k’s), employee contributions need to be made by December 31st. Typically the employee profit sharing portion can be made up until the tax filing deadline, but you should always refer to the specific rules of your plan.
To further explore any of the items discussed above, please feel free to contact us.
Thank you,
The Curran Wealth Management Team
At Curran we value service over sales and believe quality service yields happy clients. Below is our 4-step process (the first three steps at no cost to you).
A short introductory call for us to get to know one other. During this call we will discuss your financial goals, concerns and hopes for the future.
In this meeting we will go over your current financial situation, take a deeper look at your goals, discuss your risk tolerances, and collect the data necessary to build a formal proposal.
Based on our data gathering session, our Private Wealth Managers will present you with a custom proposal tailored to your needs. We encourage individuals to take the time to evaluate this proposal.
If you are comfortable with the proposal and choose to invest with Curran, our team will be there every step of the way assisting in opening the recommended accounts and facilitating all necessary parts of your onboarding process.
