Did you recently inherit an IRA from a family member? If so, then there are some steps you need to take to avoid common mistakes. Retirement accounts tend to have a lot of confusion surrounding them for this reason.
If you inherit an IRA, you’re responsible for figuring out how to handle it. Unfortunately, there's no class you can take to understand what to do with your IRA.
After all, you'll need to deal with estate planning, paying taxes, and more. It can be a lot to handle if you aren't sure what to do. Luckily, we're here to clue you in on crucial steps to take after you inherit a retirement account.
Give Your IRA a Title
First, you'll need to ensure that your IRA has an appropriate title. You should look for two critical things on the title of your IRA:
The name of the original owner (deceased)
An indication that you inherited the IRA
If the IRA is from your spouse, then you have the option of depositing the contents of the IRA into your account. If you want to take this route, you need to act within 60 days of inheriting the IRA.
If the account doesn’t come from your spouse, then you can’t move the money into your personal account. Instead, you need to start a Benefit or Inherited IRA in your name. That will enable you to transfer the assets from the inherited IRA to your new account.
Calculate Distribution Amounts
If you inherit the IRA from your spouse, then the year-end account value will determine your distribution rate. An example would be using the account value from December 31, 2019, for 2020.
If you inherit an IRA from someone other than your spouse, then the rules are different. In this case, you have 10 years to withdraw the entirety of the account. If you go beyond that period, you'll lose the remainder of the assets.
Find Out if Your IRA Has an After-Tax Basis
This is a crucial step that you shouldn’t skip. Fill out IRS Form 8606 to determine if your inherited IRA has an after-tax basis. If so, you can claim the non-deductible part of the required minimum distribution.
Plan for Paying Taxes
Lastly, you'll need to know how to handle the taxes for your inherited account. Roth IRAs and standard IRAs have differing rules here. Minimum distributions are often tax-free for Roth IRAs. That means if you plan on withdrawing the minimum amount each time, you won't have to pay taxes. Standard IRAs are different and are often fully taxable. That means you'll need to pay taxes on your distributions.
Those are the steps you'll need to take once you inherit a retirement account. By checking all these boxes, you'll be able to enjoy your inherited retirement account without any stress. Remember to ensure your account has a proper title, configure your distribution amount, and discover if you need to pay taxes.
Artificial intelligence isn’t just a theory from science fiction anymore. It’s reshaping industries all over the world, and construction is right at the center of this shift. From automated machines on job sites to smart data analytics behind the scenes, AI's role in shaping the future of construction is about more than efficiency; it’s changing how people build, design, and manage structures. Instead of simple automation, we're seeing smarter, more responsive worksites that can adapt to challenges faster than ever.
Picture this: the sun dips below the horizon, casting a golden glow across your patio. Laughter fills the air as you grill steaks to perfection, a chilled drink in hand from your outdoor refrigerator.
Owning a car provides incredible freedom, but it also carries the responsibility of basic upkeep and preparation for unexpected events. You cannot predict every issue, but a curated kit turns a major headache into a minor inconvenience.
Thanksgiving on November 27th this year is more than a meal; it’s a stage for storytelling. Families are rediscovering the joy of sharing origin tales, funny mishaps, and heartfelt memories. Some hosts place a “story card” at each seat with prompts like “What tradition would you invent?” or “What are you most grateful for this year?” These sparks of conversation transform dinner into a living archive of family history. Recording or writing down these stories ensures they’ll be cherished for generations.
A cluttered desk can lead to a cluttered mind, making it difficult to focus and be productive. A tidy workspace, on the other hand, can boost efficiency and reduce stress. This article will outline four practical ways to maintain an organized workspace, helping you create an environment that fosters clarity and productivity. By implementing these strategies, you can transform your work area into a streamlined and functional space.
