If You’ve Just Turned 70, Check Your Retirement Account to Avoid IRS Penalties
If you turned 70 and a half during 2014 and have never withdrawn money from your traditional IRA or 401 (k), you are going to be fined by the IRS. The penalty will be half the amount you should have withdrawn. You have until April 1st to avoid this.
The IRS has minimum distribution rules that force you to withdraw money after you turn 70 and a half years old. This is to ensure that people never withdraw money from a taxable retirement account. If you were born between July 1943 and June 1944, that means you are.
Figuring out what you should take off gets a little tricky and is based on life expectancy charts issued by the IRS. T.Rowe Price has an easy-to-use calculator to help you determine the minimum allocation you need so you can avoid the penalty and keep investing.
Don’t Let April Fool This Very Costly IRS Tax Trap | Daily finance