I guess we all need to make sure our paperwork is in order.http://online.wsj.com/article/SB1000142405270230444140457748...Uncle Sam is about to get a lot tougher on individual retirement account mistakes—and that could trip up investors who aren't careful.The government lets millions of dollars in tax penalties on IRAs go uncollected each year—$286 million in 2006 and 2007 alone for missed withdrawals and contributions that break the rules. The reasons range from bureaucratic hurdles to tax forms that don't provide enough information, according to a report by the Treasury Inspector General for Tax Administration, the federal tax watchdog.Now the Internal Revenue Service, which has been cracking down on secret foreign accounts and beefing up audits of high earners in recent years, is turning its attention to IRA snafus.Some 46 million U.S. households, or two out of five, hold a combined $4.9 trillion in IRA assets, according to the Investment Company Institute. The more-aggressive enforcement means those investors need to make sure their accounts are in order—quickly.</snip>intercst
Gosh amazing there is a penalty for not obeying the rules. If I don't see a Stop sign and fail to stop, I get a penalty. Here in Atlanta they need money and there is talk about raising the parking fine from $25 to $35. In addition, failure to pay in 14 days will raise the fine to $45 and failure to pay in 60 days gets up to $90. GordonAtlanta
Ha! City of Chicago had that beat years ago.I forget the exact amounts, but it worked like this:Parking ticket, $50Of course, you can fight it in court. Usually your defense was "My car wasn't even IN Chicago that day." Now, this is Chicago, so that was typically the truth.Court costs, $75. Non-negotiable, non refundable, even if you win.
Another potential snag: If your money is in a 401(k), and you still are working for the employer that sponsors that account when you turn 70½ and you don't own more than 5% of the company, you don't have to make withdrawals from that account. But if you roll over your 401(k) to an IRA, you do.----------------------------------------------------------------------Some plan docs REQUIRE distributions at 70 1/2 further complicating issues.
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