Close Close

Retirement Planning > Retirement Investing

Tax Time for Retirees (Chicago Tribune)

Your article was successfully shared with the contacts you provided.

“Maybe you thought your tax prep would get less complicated once you stopped working,” writes Jill Schlesinger, “but preparing taxes in retirement can be quirky.” For one, when you turn 70 1/2, you must take Required Minimum Distributions (RMDs) from retirement accounts (other than Roth IRAs). To clarify: This means that you must begin withdrawing funds from your retirement accounts by April 1 of the year following the year in which you turn age 70 1/2. For all subsequent years, including the first RMD year, you have to take your distribution by December 31. “To calculate your RMD,” writes Schlesinger, “take the December 31 balance of your IRA or retirement plan account and divide it by your life expectancy factor, found in the ever-fascinating IRS Publication 590.” Other things to consider during pre-tax season: potential taxation of Social Security benefits, a possible Credit for the Elderly or the Disabled, and the potential to take deductions for medical expenses and long-term care premiums.

More on this topic

Read the story.