The following commentary does not necessarily reflect the views of AgWeb or Farm Journal Media. The opinions expressed below are the author's own.
Paul is now part of the fourth generation in America that is involved in farming and hopes the next generation will be involved also. Through his blog he provides analysis and insight to farmer tax questions.
~~If you have retirement or IRA accounts and you are approaching age 70 1/2, you must be careful to make sure to take your required minimum distributions (RMD) and April 1 can be a key deadline. Holders of these accounts are normally required to start taking RMDs in the year they turn 70 1/2, however, there is an exception to this rule. For those farmers or other taxpayers who turn 70 1/2 in 2015, they can either take their RMD in 2015 or wait take it by April 1, 2016. However, if they wait until 2016, they then are required to also take their 2016 RMD in the same year, therefore, you bunch up two RMDs into one year.
We normally recommend taking the distribution in the year you reach 70 1/2, but there may be times when it is better to postpone such as when you have a large amount of income in 2015 and expect to be in a much lower tax bracket in 2016. Every situation is different so it is wise to review this with your tax advisor to determine the best option.
The penalty for not taking your RMD can be drastic since it is 50% of the RMD for that year. Make sure you don't miss the deadline if you turn 70 1/2 in 2015. You only have one week to comply.
I think you should point out the different rules for Roth IRAs. Most of us have Roths and your incomplete warning may cause some to make costly mistakes.
Yes we all succeed in letting the government talking us into savings so they could tax it at a higher rate when we get older. We all saved in the 15-20% years to get to the 30-35% bracket so they could take it away from us later. Now you can take it to your local Bank and get along of .5% so you can finish loosing it what a deal.