Posts Tagged ‘Required Minimum Distribution’

THE END IS COMING – Preparing for the Year’s End

Monday, November 25th, 2013


Our 2013 year is about to come to a close. Here are some year-end reminders for you. These rules apply to you if self-directed IRA is a Traditional (pre-tax) or Roth (after-tax).


Hitting the max out limit on your credit card, BOOOOOO! Hitting the max out limit in your IRA, HOORRRRRRRRAY!

To take full advantage of the tax benefits of a Self-Directed IRA you should contribute $5,500 this year.  If you are lucky enough to turn 50 years old in

SAVINGS blocks

2013, you are in the elite category of 50+ and can contribute $6,500 per year into your self-directed IRA account.    If you file a joint return, you and your spouse can max out your Self-Directed IRA contributions even if only one of you is working or making taxable compensation.

You have until April 15, 2014 to max out for 2013.

It’s a good idea to max out each year, just ask your CPA!  It’s a bad idea to contribute over the above-mentioned limits.  If you do contribute too much, the IRS gets to put their hand in your cookie jar for a whopping 6% tax each year on the excess amounts remaining in your account.  You have until the due date of your 2013 tax return (including extensions) to withdrawal the excess contribution.

The limits are the same for 2014, so don’t forget to add your $5,500 or $6,500 contribution to next year’s budget.

All contribution forms should be faxed (1-877-890-0929), emailed ([email protected]) or mailed (6900 Westcliff Drive, Suite 603, Las Vegas, NV   89145).


A possible tax credit?  Yes, please!

You may be eligible for a tax credit when making contributions to your Self-Directed IRA.  If you are 18 or old, not a full-time student and not claimed as a dependent on someone’s tax return, you may qualify.

The amount of the credit is 50%, 20% or 10% of your Self-Directed IRA contributions up to $2,000 (or $4,000 if you are married filing jointly), depending on your adjusted gross income reported on your Form 1040 or 1040A.

Rollover contributions are not eligible.  Distributions may affect your credit.

2013 Saver’s Credit

Credit Rate

Married Filing Jointly

Head of Household

All Other Filers*

50% of your contribution

AGI not more than $35,500

AGI not more than $26,625

AGI not more than $17,750

20% of your contribution

$35,501 – $38,500

$26,626 – $28,875

$17,751 – $19,250

10% of your contribution


$28,876 – $44,250

$19,251 – $29,500

0% of your contribution

more than $59,000

more than $44,250

more than $29,500

Here’s how it works:

Example: Jill, who works at a retail store, is married and earned $30,000 in 2013.  Jill’s husband was unemployed in 2013 and did not have any earnings. Jill contributed $1,000 to her IRA in 2013.  After deducting her IRA contribution, the adjusted gross income shown on her joint return is $29,000. Jill may claim a 50% credit, $500, for her $1,000 IRA contribution.

Think you might qualify or want to see the full rules?  See Form 8880 – Credit for Qualified Retirement Savings Contributions.


If you turned the magical age of 70½ or are about to, check out our blog about how RMD’s work.


Making a donation from your IRA, or using your RMD to make a donation

A Qualified Charitable Distribution (QCD) is an otherwise taxable distribution from your Self-Directed IRA owned by an individual who is 70½ or older that is paid directly from your Self-Directed IRA to a qualified charity.  A Self-Directed IRA account holder can exclude from gross income up to $100,000 of a QCD made for the year, and a QCD can be used to satisfy any Required Minimum Distributions taken from your Self-Directed IRA.  Also, the amount of a QCD excluded from gross income is not taken into account in determining any deduction for charitable contributions.  For more information on charitable donations see Notice 2007-7, Section IX.


Now is the time to tie-up loose ends for this year and plan for next year.  This year, there are maxed out contributions to be made, saver’s credits to apply for, RMDs to take and Charitable Donations to be made.  For next year, budget your future contributions, start due diligence on next year’s investments, budget a couple improvements on your current investments, and follow us on your favorite social media sites so we can keep you educated on the amazing world of self-directing your retirement funds!


Jaclyn M. Grella

800-454-2649 x1119

[email protected]


Required Minimum Distributions

Tuesday, November 12th, 2013



You may have already received notice from us that its about that time of year again when you may need to take an Required Minimum Distribution (RMD) from your Self-Directed IRA account. An RMD is the minimum amount you are required by the IRS to take from your retirement account each year. You, as the account holder and/or inheritor of a retirement account, are responsible for calculating and taking your RMD on time.  Here are some of the basics. bday cake


If you were lucky enough to turn 70½ years old this year, you need to take your RMD by 4/1, and take it every 12/31 in the preceding years. If you turned 70½  years old last year, you need to take your RMD by 12/31. When it comes to Self-Directed IRAs, it does not matter if you are working or retired, you need to take an RMD when turning 70½.


When you inherit an IRA from a spouse you do not have to take the required minimum distributions; however, its a different story if you inherit money from someone other than your spouse.  Non-spousal IRA heirs must withdrawal the minimum amount each year starting December 31st of the year after the IRA was inherited, whether it is a traditional IRA or a Roth IRA.


To calculate, use your account balance as of December 31st of the prior year and divide it by the account holder’s life expectancy or the inheritor’s life expectancy.   Find the Life Expectancy Chart from IRS.GOV – see Publication 590.

Remember, when you have hard-to-value assets in your Self-Directed account, like real estate, LLCs, Trusts, Private Placements, etc., they need to have a value so you know your full account balance as of December 31 of the prior year.  When it comes to real estate, you need a fair market appraisal completed by a licensed real estate appraiser.  If it’s a non-real estate asset and you need help finding a trusted, reliable person to help with a valuation, let us know and we will send you the name of someone you can contact. Income tax is required on the payout unless  your Self-Directed IRA is a Roth account. Here is the IRA RMD Worksheet for IRA account holders whose spouse is 10 or more years younger and is the sole beneficiary of the Self-Directed IRA.   Please note that this category has a different life expectancy table.  See Appendix C Life Expectancy Table II (Joint Life & Last Survivor Expectancy)


♦   What if I have more than one self-directed IRA account?

›  If you have more than one Self-Directed IRA, you must calculate an RMD amount for each account; however, you may withdrawal each amount from one Self-Directed IRA account.

♦  Who is responsible for calculating my RMD amount and making sure its withdrawn from my account on time?

›  You, as the account holder and/or inheritor.

♦  What happens if I do not take my RMD by the required deadline?

›  If you fail to withdrawal your RMD on time, or you do not withdrawal the full amount you are in trouble.  The amount you failed to withdrawal is taxed at 50%.  You will need to file a Form 5329 Additional Taxes on Qualified Plans (including IRAs) and Other Tax Favored Accounts with your Federal tax return for the year in which your RMD was to be taken from your Self-Directed IRA.  However, your penalty may be waived if you establish that the shortfall in distributions was due to reasonable error and that reasonable steps are being taken to remedy the shortfall.  Simply file said Form 5329 and attach a letter of explanation.  This form and the instructions for this form should only be taken from the IRS.GOV website.

♦ Can a distribution in excess of the RMD for one year be applied to the RMD for a future year?

›  No.

♦  Can RMD amounts be rolled over into another tax-deferred account?

› No.


Once you have calculated your RMD amount, simply complete our withdrawal form so we can send your RMD from your Self-Directed IRA account. Once the form is complete, you can fax (1-877-890-0929), email ([email protected]), or mail it to us (515  East 4500 South, Suite G-200, Salt Lake City, UT 84107). All forms must be turned in by December 31st of the year the RMD is due. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. Please consult with a professional specializing in these areas regarding the applicability of this information to your situation. Author: Jaclyn Grella 800-454-2649 x1119 [email protected] Find me on Facebook, LinkedIn, Twitter and Google Plus Find Accuplan on Twitter Google Plus, You Tube and Facebook