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Tax experts - Some Estate Planning Tips for the End of the Year

Monday, December 22, 2014
Tax experts, including tax attorneys say that Individual Retirement Accounts (IRA) are very good way to plan for retirement which plays an important part in your estate planning.  Our tax attorneys are providing you with ways that the IRS recommends saving for retirement.  Here are some important guidelines to follow for the end of the year if you have an IRA or plan on opening an IRA soon.

Tax attorneys recommend knowing the limits, especially when estate planning.  Tax experts recommend contributing up to $5,500 or $6,500 if you over age 50 to an IRA, either Roth traditional.  You and your spouse can both contribute to the IRA even if you are filing a joint return. It does not matter if only one person has an income that is taxable.  When looking to the future and looking out for your family holdings, it may be necessary to decrease the amount you deduct for your traditional IRA contribution if either person in the household is contributing to a work-sponsored retirement plan and you earn an income above a certain amount.  In general, you can contribute to your IRA until you submit your 2014 federal income tax return on April 15, 2015.

Tax attorneys also advise against contributing in excess because you will need to pay a 6% tax on the excess amount over the IRA limits for the year for each year that you exceed the amount.  The good news is that you can avoid paying the tax by taking out the overage from the account before you submit your 2014 federal income tax return.

Also, tax attorneys recommend taking required distributions which will be helpful for your estate planning, especially if you have reached the age of 70½ when you will be required to take minimum distribution from your traditional IRA, not the Roth IRA, by December 31, 2014.  Remember that if you have multiple traditional IRAs, then you need to calculate the minimum distribution for each IRA separately.  In addition, you always have the option of withdrawing the entire amount, but if you neglect to take the minimum distribution in a timely manner, then you will face an excise tax, approximately 50%, on the minimum distribution that you did not withdraw.

Finally, tax attorneys recommend claiming the saver’s credit, also known as the retirement savings contributions credit, to optimize your asset planning.  To qualify for the saver’s credit you need to contribute to a retirement plan or an IRA which can either add to your refund or decrease your tax owed.  

The Strategic Tax Lawyers are staffed with credible tax attorneys and estate planning attorneys who can assist you take care of your estate in order to make sure that your family and loved ones are taken care of. Call the Strategic Tax Lawyers at (800) 669-4775 for a free case consultation.