Whether you are still working or retired, you should periodically review your individual retirement accounts (IRAs). Here are a few things to remember.
Required Minimum Distributions (RMDs)
If you are age 70½ or older this year, you must take a 2012 RMD by December 31, 2012 (April 1, 2013, if you turned 70½ in 2012). You can calculate the amount of your IRA RMD by using the RMD worksheets. You must calculate the RMD separately for each IRA that you own other than any Roth IRAs, but you can withdraw the total amount from one or more of your non-Roth IRAs. Remember that you face a 50% excise tax on any amount of an RMD that you fail to take on time.
If you’re still working, review the 2012 IRA contribution and deduction limits to make sure you are taking full advantage of the opportunity to save for your retirement. Remember you can make 2012 IRA contributions until April 15, 2013.
If you have exceeded the 2012 IRA contribution limit, you may withdraw excess contributions from your account by the due date of your tax return (including extensions). Otherwise, you must pay a 6% tax each year on the excess amounts left in your account.
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