A few of the new tax laws and changes, included in an article from The Motley Fool. This one is on IRAs, I will post more later By Sean Williams December 22, 2014 The upcoming change of the calendar from 2014 to 2015 brings a number of critical tax changes that consumers need to be aware of if they wish to maximize their income and minimize the amount of taxes they pay. Since 2001, Congress has enacted more than 5,000 tax code changes, and this doesnt even include the inflation-adjusted changes that the Internal Revenue Service implements each year. Thats a mountain of changes for a tax code that now has close to 4 million words. Keeping up with the biggest tax changes each year can be something of a chore, especially if you eschew do-it-yourself tax software and tax professionals in favor of handling your own taxes. With that in mind, today well take a look at a few of the biggest tax changes for 2015 and examine how they might affect you. IRA rollover limits Theres no tax change with more significance, in my opinion, than the modifications being made to individual retirement account rollovers in 2015. Source: PTMoney via Flickr As it stands now, and through the remaining days of 2014, you can roll over a tax-advantaged IRA such as a SIMPLE IRA, SEP IRA, or traditional or Roth IRA, hold that money for up to 60 days, and then redeposit it into a new IRA without paying any taxes or penalties. However, beginning in 2015, one of biggest tax changes investors will see is the government limiting taxpayers to one IRA rollover per year. All of the aforementioned IRAs count as a single plan. Thus, if you have both a traditional IRA and a Roth IRA and want to roll them both over into a different IRA, you would have to choose between one or the other, otherwise youd wind up paying a potentially hefty penalty. According to the IRS, the penalty for rolling over more than one IRA in 2015 would be the account holders ordinary income tax rate on the proceeds, a 10% penalty if it was an early withdrawal (before age 59-1/2), and a potential 6% excise tax if the rollover amount exceeds their annual allowable IRA contribution limit. In other words, if youre planning to make multiple IRA rollover moves, youll want to get the ball rolling before 2015 hits.
Posted on: Mon, 22 Dec 2014 15:36:46 +0000
Trending Topics
Recently Viewed Topics
© 2015