ACT FAST: Limited Time Offer for RMDs
Thanks to a hot-off-the-presses provision in the new tax law, taxpayers over 70 ½ have a very limited window to address 2012 required minimum distributions (RMDs) from their retirement accounts.
Here’s what happened: an incentive for donating your RMDs directly to charity tax-free expired in 2011, so at the end of 2012 many of you weren’t sure what to do. Some of you may have taken your RMD as usual and used that money toward regular living expenses, but other retirees who typically donate their RMD to charity may have taken a different approach.
You need to pay attention to this new provision if you either:
- Did not take a distribution at end of 2012 (and were therefore subject to penalty) because you couldn’t contribute directly to a charity.
- Took a distribution at the end of 2012 to avoid a penalty but did not contribute to a qualifying charity because there was no tax incentive to do so.
Now, you have until Jan. 31 to contribute up to $100,000 of your RMD to a qualifying charity and not have it count against your 2012 AGI.
But you have to act now! Whatever your situation, you must take action before Feb. 1.
Ohio Tax Planning Assistance
Not sure if you need to take a RMD? Concerned about how this new law could impact your tax planning? Contact Rea & Associates. Working with high-net worth individuals and business owners, our Ohio tax services team can help you to develop a comprehensive tax planning strategy. We’ll work with you to comply with this and other new tax laws and help you to develop a solid, long-term plan.