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The end of the calendar year is an important date for retirement plans. Self-directed IRA owners will want to take note of these deadlines coming up in December. Make sure you keep track of important IRA dates to ensure you get the most out of your retirement savings! Here are two important matters to consider this year, before December 31st, 2015:
Required Minimum Distributions
For Traditional, SEP and SIMPLE IRA holders who have reached the age of 70 1/2, a minimum amount must be distributed from their IRA by the end of the calendar year (December 31). For the first year of distribution, the individual may postpone the distribution up until April 1st of the following year. Keep in mind however, that there will be two distributions for that subsequent year. If the minimum amount is failed to be distributed, the individual will incur a 50% penalty based on the minimum amount. Individual 401(k) plans are also subject to the same rules, however, the consequence of a distribution failure may be plan disqualification.
Inherited IRAs also called beneficiary accounts are subject to the Required Minimum Distributions. If an IRA holder of a Traditional, Roth, SEP or SIMPLE IRA passed away in 2014, the beneficiary of the account may be required to take a minimum amount from the beneficiary account by the year following death.
Failure to distribute has the same 50% penalty associated with this failure.
Deadline to establish separate accounts for beneficiaries or IRA holders who passed away in 2014: December 31st, 2015.
Individual 401(k) Establishment
A small business owner who fits the criteria of establishing an individual 401(k) choose to establish the plan by signing a plan document by the end of their fiscal tax year. For calendar year plans the adoption agreement (document) must be signed by December 31 to establish the plan for 2015.
Last day of the fiscal tax year of the employer for a calendar year plan is: December. 31st, 2015.
If you would like to do any of the above, now is the time! Please contact us if you have any questions.