If you have a Health Savings Account (HSA), you will want to give some thought to what will happen to this account after your death. The rules are a little tricky and careful planning is important to minimize the tax bite.
Health Savins Account Beneficiaries
You should name a beneficiary for your HSA, just as you would for your IRA or company retirement plan. After your death, any funds remaining in your HSA are payable to the beneficiary you named on the account. You are not required to name a spouse or an individual who is eligible to make HSA contributions.
Over $23 trillion sits in retirement plans across America, according to the Employee Benefit Research Institute. Even that figure may be low.
Since that figure was calculated in 2011, markets have increased and retirement savers have contributed even more to their plans, adding thousands of dollars to retirement plan balances. No doubt, trillions more sit in bank accounts, brokerage accounts, mutual funds, and other “non-qualified” investment accounts.
But if you thought your most important retirement asset was some sort of financial account, you would be wrong. Research done by the Center for Retirement Research at Boston College indicates that staying married may be the key to financial security in retirement.
IRA-to-IRA Rollovers and Roth IRA-to-Roth IRA Rollover
- Using 60-day IRA rollovers instead of using transfers to move IRA funds
- New stricter IRA rollover rules (effective January 1, 2015)
- Once-per-year is for all IRAs and Roth IRAs
- IRS has no authority to correct these mistakes
- New client rollover mistakes – not asking about prior rollovers
- Not knowing the exceptions to the once-per-year IRA rollover rule
Non-Spouse Rollovers are NOT Permitted
- Non-spouse beneficiary cannot do a rollover
- Taking a lump-sum distribution
- Putting a decedent’s IRA funds into your own IRA
- Paying out the entire IRA to a trust beneficiary
By Beverly DeVeny, Ed Slott and Company, LLC
Did you do a Qualified Charitable Distribution (QCD) last year? Make sure the tax preparer knows about it.
The IRA custodian is not required to report a QCD transaction on Form 1099-R. Instead, it will show up as a regular distribution to the IRA owner. A regular distribution is normally a taxable event. A tax preparer, especially at this time of year, will simply look at the 1099-R and include the entire amount in the IRA owner’s income where it will become taxable.