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Question for the Money Doctors

Question submitted on Apr 16, 2012.

Question

I was born 6/30/42 and I will be 70 1/2
years old on 12/31/12, so I will have 2 RMD''s in 2013. Is there a way to lessen the impact on my taxes for 2013????
Thank you for your answer.

Answer

I recommend you do a tax projection for both 2012 and 2013.  Compare taking a RMD in 2012 and 2013 with taking both in 2013 to determine which amount of total tax is lower over both years.  If it's close to even, you might be inclined to defer the initial RMD until April 1, 2013.

Another item to evaluate, if you are working with any advisers, would be to pay any investment advisory fees from accounts outside of your IRA.  This would make them deductible, subject to 2% of your adjusted gross income and if you can itemize your deductions.

Both of these items can be evaluated with the assistance of a CPA, PFS credential holder (www.findapfs.com) in your local market.


For additional information visit http://www.360financialliteracy.org/