Client called said he had heard that IRA's were not taxable this year. I told him that RMD were not required this year, but IRA's were still taxable when withdrawn. Have I missed something?
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You gave the correct answer. RMDs are not required this year. IRA distributions are still taxable. -
One thing
you might follow up on, jenMO, is why he asked. We all know how clients sometimes
dont' frame their questions with all the facts we need.
If he's ALREADY taken the RMD, say back early this year, yes, it is taxable; unless he
takes steps to voluntarily return the whole amount within the time frame allowed by IRS
in recent ruling. IOW he may have already taken it, heard it's not taxable and think he's one step ahead, i.e. tax free on that amount.ChEAr$,
Harlan Lunsford, EA n LAComment
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He's not 701/2 yet so no RMD. You can never tell what they hear, from who, or how they understand it. Thanks for the info.Comment
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Paying back
RMD's that might have been drawn. The way I read it you can pay back "ONE" distribution. If you were taking out monthly payments you can pay back ONE. Do others read it the same way. I think it has to be done by November 30.Comment
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yes, ONE distribution. That's it. and I believe the option to repay is not available to bene RMDs although I may be incorrect in that.Comment
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I agree with what Harlan said. I got a call from a client who bought a house last year and said she heard that remodeling cost were tax deductible. I asked her who she heard that from. She replied, “From the guy doing the remodeling job”. I explained the energy tax credit and told her that was the extent of what was available. Within 10 minutes she called back and said, “But the materials are deductible right?” I said “Did you just talk to your carpenter?” I assured her that she shouldn’t seek remodeling advice from me nor should she take tax advice from her carpenter.In other words, a democratic government is the only one in which those who vote for a tax can escape the obligation to pay it.
Alexis de TocquevilleComment
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Why is she wasting time getting tax advice from a carpenter?
EVERYBODY KNOWS that hairstylists and auto mechanics are the only experts on matters this complex!"The only function of economic forecasting is to make astrology look respectful" - John Kenneth GalbraithComment
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ChEAr$,
Harlan Lunsford, EA n LAComment
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And they clearly have excellent judgement...Last edited by JohnH; 11-03-2009, 04:22 PM."The only function of economic forecasting is to make astrology look respectful" - John Kenneth GalbraithComment
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