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End of Year Alert: IRA RMDs are back

12-13-2010 - IRA owners age 70 1/2 and older should not forget that required minimum distributions are back in effect in 2010.  According to a Fidelity Investment survey, nearly half of Americans age 70 and older are not aware that the minimum withdrawal requirement that had been suspended to help retirees recoup some of their stock market losses, was reinstated in 2010. If you fail to take the required  minimum distribution by the deadline - Dec. 31, 2010 for most retirees - you face hefty penalties.

If you have converted to a Roth IRA before the end of this year, you will have to pay income taxes on the money. You can pay the entire tax bill when you file your 2010 taxes, or pay half on your 2010 tax return and the other half in your 2011 return. Because you have paid taxes in advance on a Roth, your heirs can inherit a Roth IRA tax-free.

For more information about how your IRA can best fit into your overall estate plan, contact the attorneys of The Karp Law Firm.

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