Important Retirement Deadlines

IRAs have numerous deadlines that people need to be aware of,” said Jeffrey Levine, an IRA technical consultant with Ed Slott and Co. “Most of the time, missing a key deadline is an irrevocable and irreparable mistake. Even in the rare cases when a deadline mistake can be fixed, the solution tends to be costly and time consuming.”

September 30 – This is the cash out date for someone who has inherited an IRA from someone who has passed away in 2011.  Those who are paid off by this date will not be considered when calculating required minimum distributions.  This is especially important when one of multiple beneficiaries is older or a “nonperson” such as a charity.

October 1 – A SIMPLE IRA must be established no later than October 1st.

October 15 – The last day to re-characterize a Roth IRA conversion.  “The re characterization provision is one of the biggest benefits in the entire Tax Code, allowing someone to completely undo a Roth conversion, for any reason, and get back the taxes that were paid,” said Levine. “Anyone who made a 2011 conversion should make sure to review it as we near the deadline to see if the conversion is still the right move for them.”   The 15th is also the last day to remove excess IRA contributions or be penalized.

December 31 – The last day of the year is the most important deadline of course.  You must take your Required Minimum Distribution if you’re aged 70 1/2 or older.  Also, the President Bush-era tax cuts expire so this is also the date for making a Roth conversion that you would be able to include in your 2012 taxable income, says Ben Norquist, the president and CEO of Convergent Retirement Plan Solutions.  Finally, if you have a Solo 401k, the plan must be established by December 31 to make deductible contributions for 2012.

For more details about these deadlines, check out this article.

With all these deadlines to remember, it’s best if you consult with a tax expert.  Contact the IRA Financial Group today so you don’t miss a deadline!


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