Taxes
Structuring IRA Distributions To Avoid Penalties – Secure Harbor Planning: A Few Useful Ways
IRA Distribution Rules are a mine field. One incorrect move and you can discover yourself faced with high taxes and penalties that may wipe out years of savings and investment. Complicating issues is the Darwinian evolution of IRAs that have taken place since the pioneer IRA was introduced in ’74 with the enactment of the Employee Retirement Income Security Act (ERISA ). Since ’74, IRA rules have altered dramatically and legislation was enacted to rigorously punish those who don’t follow the rules, to the letter of the regulation. IRAs come in a lot of flavors but, for purposes of this article we’ll focus on the two chief types of IRAs: Traditional IRAs and Roth IRAs.
Techniques for Minimizing Penalties on Early Distributions
Normally, any distribution from an IRA before you reach age 59 1/2 is considered an early distribution and is subject to a 10 percent penalty on the taxable quantity received in a distribution. There’re certain Roth IRA information that can be used to avoid the burden of this early withdrawal penalty. Read the rest of this entry »
