Tag Archives: Required Minimum Distribution

Posted in General Financial Planning, Investing/Financial Planning, Retirement Planning, Tax Related

Tagged Early Retirement Distribution, fORM 8606, Required Minimum Distribution, RMD

RMD Season is here – Is your DOB between 7-1-47 to 6-30-48 ? You have a decision!

Posted on October 15, 2018 by John Kvale CFA, CFP | Leave a comment

RMD – AKA Required Minimum Distributions – the Governments’ mandate of distribution from our IRA (Pre-Tax) funds in order to finally occur taxes is upon us…..

RMD Season

In the coming weeks we will begin transferring mandated funds from our IRA/Qualified/Pre-Tax accounts to their directed destinations….

As a reminder this is so the US Government gets to take the taxes due …

IMPORTANT (Neat) Facts –

RMD $$ mandated amounts are determined by the value of applicable accounts on the last day of the prior year
Current year age is a necessary factor included in calculating the RMD – see below next, first time exception – each year of seasoning (getting older) we are forced to take more out of the applicable accounts – hey the IRS has never taxed us on these in many cases – it’s their time!
After tax contributions to a qualified account MUST be accounted for in order to avoid taxes – here are greater details and our taxpayer obligations on this – don’t overpay – the IRS is not tracking this and will not come to the rescue and lower your taxes
All of an individual’s accounts must be included/totaled/value (certain exceptions are made to those continuing to work) to ascertain the needed distribution
Any one account can be used to satisfy the needed distribution (you do not have to take a little from each account, making it easier from an organization standpoint) BUT you must take at least the minimum distribution
Failure to take the mandated distribution amount COULD result in a 100% tax – Break in – our experience has been the IRS is nice about this, but let’s not test them

Here is a neat three part series from a while back that is worth a review!

70.5 is the key starting age

The mandatory commencement date of RMD’s is the year AFTER you turn 70.5 years young, under current tax law…

If you accept this first year deferral, you will incur two RMD’s in the year you commence your first RMD…

Depending on the situation, it may be advisable to distribute your first year RMD a year early so as not to clump your taxable distribution….

Is your DOB between 7-1-47 to 6-30-48?

Then you turn 70.5 in 2018 and you CAN defer your RMD until 2019, however you will have two RMD’s next year — be careful, large distributions could toss you into an extra tax bracket.

Reach out if you have ANY questions, we have plenty of time, BUT the clock is ticking…

Have a great ‘RMD Efficient Distribution” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

street-cents

Posted in General Financial Planning, Investing/Financial Planning, Retirement Planning, Tax Related

Tagged Early Retirement Distribution, fORM 8606, Required Minimum Distribution, RMD

November 2017 Podcast Video, Financial Planning and Capital Market Update- By John Kvale

Posted on December 1, 2017 by John Kvale CFA, CFP | Leave a comment

Here is our November 2017 Monthly review. If you are too busy to read, feel free to listen as we describe our post and thoughts in friendly podcast format.

Enjoy!

November 2017 Video

Thank You Holiday Party Goers!

Financial Planning Tip(s)-

RMD – Required Minimum Distribution Reminder

In our post here this month, we reminded all of those with birthdays between 7-1-46 and 6-30-47 that have the unique option of deferring their first mandatory RMD taxable distribution to next year, but if you do that will mean you need to take two distributions in the same year.

Considerations:

Higher/Lower Income
Bigger/Smaller Expenses
More/Less Donations

The first year is the only time we get this option, all the future years are mandatory with not option.

Capital Market Comments

A lot of positive indicators – Markets taking notice

It appears the US and Global Economies are finally making a synched recovery. Capital Markets are taking notice.

As we mentioned here, Unemployment rate hit a very low 4.1%

This time, International Markets have wind in their sails as well….

MSCI Global Index

See you on the other side of a New Year !

Happy Fall Season!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

www.jkfinancialinc.com

www.street-cents.com

Posted in General Financial Planning, Investing/Financial Planning, Market Comments, Monthly Review, Tax Related, Video

Tagged Deferred RMD, EFA, Global Growth, MSCI, Required Minimum Distribution, RMD

RMD ALERT : If your DOB is 1-1-45 through 6-30-45 … THIS IS FOR YOU!

Posted on December 7, 2015 by John Kvale CFA, CFP | Leave a comment

Required Minimum Distributions (RMD’s) can be deferred for the FIRST year after you turn 70 and 1/2 years young. Sounds neat huh…. CAUTION !

Deferring Your First Year RMD Causes a Double Dip

If you choose to defer your first year RMD, be aware you will HAVE to “Double Dip” and take two distributions the following year. This may cause adverse tax consequences!

Once you pass, you have no other choice, and not making a decision IS making a decision.

Confused ?? Not to worry, you still have time this year … Well, until 12-31-15 ….. Just give us a call !

Have a Great Day!

John A. Kvale CFA, CFP

8222 Douglas Ave # 590

Dallas, TX 75225

Posted in General Financial Planning, Investing/Financial Planning, Retirement Planning, Tax Related

Tagged Double Dip RMD, Early RMD, Required Minimum Distribution, RMD, Smooth RMD

RMD ALERT : If your DOB is 1-1-44 through 6-30-44 … THIS IS FOR YOU!

Posted on December 8, 2014 by John Kvale CFA, CFP | 1 comment

Required Minimum Distributions (RMD’s) can be deferred for the FIRST year after you turn 70 and 1/2 years young. Sounds neat huh…. CAUTION !

Deferring Your First Year RMD Causes a Double Dip

If you choose to defer your first year RMD, be aware you will HAVE to “Double Dip” and take two distributions the following year. This may cause adverse tax consequences!

Once you pass, you have no other choice, and not making a decision IS making a decision.

Confused ?? Not to worry, you still have time this year … Well, until 12-31-14 ….. Just give us a call !

Have a Great Day!

John A. Kvale CFA, CFP

8222 Douglas Ave # 590

Dallas, TX 75225

1 Comment

Posted in General Financial Planning, Investing/Financial Planning, Retirement Planning, Tax Related

Tagged Double Dip RMD, Early RMD, Required Minimum Distribution, RMD, Smooth RMD

Realized Gains and Loss Tax Report …. RMD Letters … Travel Reminder

Posted on February 13, 2014 by John Kvale CFA, CFP | Leave a comment

Since we have had so many posts this week I will keep this one short and sweet for your reading pleasure !

Realized Gains and Loss Report Complete

All Realized Gains and Loss Reports have either been posted to your Personal Vault or are on their way to your mailbox. Reports were completed and mailed yesterday !

Required Minimum Distribution (RMD) Notification

Per US Federal Tax rules, investment firms holding Qualified (IRA, SEP, 401k etc) funds at year end December 31 are forced to let you know what your RMD is for the current/following year by January 31 .

As such you will receive notification from ALL firms holding ALL accounts (no matter how many you have) noting your total mandated RMD for that specific account. This is the total RMD mandated for the current year and needs to be withdrawn by the end of the current year.

Whew…sorry that got wordy, my point was to let you know most likely you are receiving automated notices that you have 11 months to complete….. much better.

Travels and Office Schedule

One of my favorite Willie Nelson songs is “On the Road Again” …. and I am …just to let you know.

Also, Monday is Presidents day, with Capital Markets, Banks and Government entities closed, our office will be as well. We are never far from technology … yaya Nerds…

Have a good day!

John A. Kvale CFA, CFP

8222 Douglas Ave # 590

Dallas, TX 75225

Posted in Investing/Financial Planning, Tax Related

Tagged Realized Gains and Losses, Required Minimum Distribution, RMD, Tax Forms

Required Minimum Distribution (RMD) Part Three (Final): Two Most Important Items of Any RMD, Advanced Techniques

Posted on October 30, 2013 by John Kvale CFA, CFP | Leave a comment

In our final of a three-part series of RMD, these are the most complicated techniques and very specific in nature. Every situation is different, please check with us or your tax professional prior to implementing any of these, as these are not recommendations, only possibilities. These techniques can be very helpful “if the shoe fits!”

Before we begin, one last reminder.

Two Most Important Items for any RMD

Do not forget to take it.
Keep good records.

Stretch IRA/RMD

Rather than distributing all funds immediately or over a mandated five-year period of time, giving heirs the opportunity to S*T*R*E*T*C*H (my attempt at grammatical humor) their IRA and other qualified benefits can be very tax friendly. Having a trust as beneficiary or keeping your old company 401k plans disqualify you from this in most cases, another reason why we rarely find it a better option to keep an old 401k at a company plan.

RMD Deferral

If you are still working, you may be able to defer your RMD for the company plan you are a participant. VERY IMPORTANT … the other qualified IRA plans will most likely still require summing the total and distributing a required RMD. This option is very specific in nature, check with us, your tax professional, or your HR representative for exact details, and keep good records of your discussions.

RMD Off-set

“In and out” of certain qualified plans I.e. SEP or others may be a possibility. If you are mandated to take and RMD, but still working, you may be able to make/receive an offsetting contribution. Be sure to check your plan specifics on this technique.

RMD Distribution Techniques

Eventually, no matter what you will need to take an RMD, so here are the popular options for where the rubber meets the road.

Switch the distribution to your taxable account and withhold taxes (far and away our most popular technique.)
Fund a Roth with the RMD funds.
Spend it.
Donate to charity.

In closing, we hope you have enjoyed our three-part series. Here is the link to the First Part “What and Why?” and Here is the Link to Part Two “Should You Take it Early?”.

Have a Great Day!

John Kvale CFA, CFP

8222 Douglas Ave # 590

Dallas, TX 75225

Posted in General Financial Planning, Investing/Financial Planning, Tax Related

Tagged Required Minimum Distribution, RMD, RMD Deferral, RMD In and Out, stretch IRA

Required Minimum Distribution (RMD) Part Two: Techniques … Should You Take Your First RMD Early ? … Maybe

Posted on October 23, 2013 by John Kvale CFA, CFP | 4 comments

In our continuing three part series on RMD (Required Minimum Distributions) started last week here, this week we discuss a few more complicated techniques and items.

RMD Distribution Technique

While the IRS mandates our RMD amount each year (click here for RMD Calculator) they do allow us the option of lumping our various accounts together and only taking a distribution from one account if desired.

Withdraw from your most liquid and keep your best earning IRA while avoiding any withdrawal penalties may be a possibility by directing your TOTAL distribution from just one IRA. Do not forget to add them all together as that number is what the IRS wants to see us take our distributions based upon.

Keep Up With After Tax Contributions

If you have any after tax contributions in any of your qualified/IRA/RMD accounts be sure to keep up with the basis. Withdrawals from a taxable RMD account are taxed pro-rata and will not be taxed on your after tax basis. Check with your tax professional, but this basis should also be showing up on form 8606 EVERY YEAR in your tax return.

Taking Your Frist RMD Early

Uncle Sam gives us first time RMD ‘ers a break and allows that you take your first RMD as late as April of the following year. Ahhh ….. but there is a catch, if you wait/defer your first RMD, you will be faced with TWO RMD’s in this tax year. Every situation is different, so choose carefully, but be aware if you delay the max you will double up!

These are not recommendations as there are many moving parts when it comes to RMD’s. No matter what, do not forget your obligation to take your RMD and know there are multiple items you may want to consider when taking.

Have a Great Day!

John Kvale CFA, CFP

www.jkfinancialinc.com

8222 Douglas Ave # 590

Dallas, TX 75225

4 Comments

Posted in General Financial Planning, Investing/Financial Planning, Tax Related

Tagged IRA, Required Minimum Distribution, RMD, RMD Calculator

Required Minimum Distribution (RMD) Part One … What and Why??

Posted on October 16, 2013 by John Kvale CFA, CFP | 1 comment

For many, once we reach the age of 70.5 IRA and other Qualified plans mandate a distribution so Uncle Sam can get his fair share of taxes. For some, RMD’s or Required Minimum Distributions occur even sooner.

What is an RMD ?

A Required Minimum Distribution (RMD) occurs most frequently for those turning age 70.5 with IRA or other Qualified (fancy word for never taxed $$) funds. In certain instances, as an example, if a stretch IRA has been commenced, in order to avoid taxes, any age person may be required to complete a RMD.

Why an RMD ?

Taxes, taxes, taxes… In almost all cases the underlying reason for the mandatory distribution is to pay Uncle Sam his due. Before getting too upset, remember, these funds most likely have been deferred without taxes, grown/compounded tax deferred, and are just now becoming taxable. Taxes are ONLY on the funds withdrawn … Not a Bad deal!!

Required means Required … DO NOT FORGET

Uncle Sam has the right to charge a 100% tax on funds not distributed that were in need. While there are certain workarounds if you forget, be safe, keep good records, and make sure you are taking those RMD’s in a timely fashion.

Next week, more neat techniques, time-saving ideas, and special circumstance options with our RMD series !

We as a firm are beginning the distributions now for clients, most often just moving funds from a tax deferred/qualified account to a taxable account and withholding taxes … More on this technique later.

Have a Great Day!

John Kvale CFA, CFP