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Five Dates IRA Holders Must Circle on Their Calendars

Estimated reading time: 2 minutes, 13 seconds

It’s tax season, and if you’re an IRA holder, it’s also time to begin thinking about deadlines for RMDs and previous year contributions.

Kingdom Trust has compiled a list of five dates (two fast approaching!) to help you ensure you won’t be taxed or miss out on any of the applicable changes that need to be made to your Self-Directed IRA.

For starters, if you turned 70½ in 2014, the deadline to take your first Required Minimum Distribution (RMD) for the previous year in April 1, 2015. Keep in mind that RMDs are normally due by the end of the year for which they are being taken, but in the case of the first RMD, the IRS allows an extension of three months.

While most noteworthy for being tax day, April 15 is also important to IRA holders, as this is the last day that IRA holders can make 2014 contributions to an IRA and have it count toward 2014’s tax return.

April 15 is also notable for being the deadline to perform an IRA recharacterization and remove any excess contributions. Likewise, if you received an extension on your 2014 tax return, October 15 is the deadline for recharacterizing IRA contributions. If you would like to change (i.e. recharacterize) a Traditional IRA contribution to a Roth IRA contribution, or vice versa, or recharacterize an asset held in your account in-kind, then it must be done by this date to count toward the current year. For more information on whether this is beneficial to you and your Self-Directed IRA, consult your tax and/or investment advisor.

In order to request a recharacterization from Kingdom Trust, you must complete a Recharacterization Notice and Transfer Direction form (found in the Manage My Account page). Please contact us if you have any questions or need assistance with the recharacterization form.

If you are interested in establishing a SIMPLE IRA for the current year, you must do so before October 1. For more information on a SIMPLE IRA, visit the IRS page on the plan here.

If you received an extension, you have more time to deal with excess contributions. If you’ve made a contribution(s) that is in excess of IRA tax limits, you will have until October 15 to remove the excess amount.

As mentioned above, if you have begun taking RMDs, then the annual distribution deadline is the end of the year, or by December 31. If you don’t take your RMD on or before this date, the amount that should have been distributed will be subject to penalty or excise tax of 50 percent.

December 31 is also the deadline to convert a Traditional IRA into a Roth IRA. Note that in a conversion the year of the distribution transaction determines the year of taxation.

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