Why is money withdrawn from a retirement account taxed?
- David Greene
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I decided that shortly after tax time is a good time to answer this question because I always have clients in this predicament every year! I want to use this answer as a warning to anyone thinking of making an…
Can one who withdrew funds from his retirement account in 2020 due to COVID pay the money back without paying taxes?
- David Greene
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Section 2202 of the CARES Act, enacted on March 27, 2020, provided for some special rules for paying back distributions from retirement plans and IRAs if the withdrawal was related to COVID. One new provision is that the amount withdrawn…
Should an IRA or 401k be transferred into a trust?
- David Greene
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It is definitely not a good idea! If you put your IRA or other qualified retirement account into your Living Trust, the IRS will consider it as a distribution and you will be taxed on the entire amount immediately. There…
How is a pension taxed?
- David Greene
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As a pension fund is growing during an employee’s working years, it is usually funded with pre-tax dollars and the money going into the pension is not taxed at that time. However, when a person retires and begins receiving his…
Can I be taxed in retirement? How?
- David Greene
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There are six primary ways you can be taxed in retirement: (1) Traditional IRA or 401(k) withdrawals – this money is always taxed when taken out, no matter at what age; (2) Social Security benefits – whether or not taxed…
Is there any relief from taxes for a late rollover (Part 2)?
- David Greene
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In my earlier blog I answered that there are new procedures that can be used to get relief if certain criteria are met. They are: (1) An error was made by the financial institution, (2) The distribution check was misplaced…
Is there any relief from taxes for a late IRA or 401K rollover?
- David Greene
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The general rule is that if you take a distribution, it must be rolled over into another qualified plan within 60 days to avoid taxation and the 10% penalty. There has always been a “hardship” waiver for certain events causing…