Finding a tax advisor
I have an inherited IRA and will need to also start receiving RMDs on my own IRA starting next year. I’ve been looking for a tax advisor to help with strategy for minimizing IRMAA and income tax impacts for the next 7 years.
I know there is a tool for financial advisors and would like to know if there are any options for finding a tax advisor who can help develop a strategy with me.
Terry Says
Let’s start by considering the issues you face. You MUST take your RMDs — from each IRA, on schedule. The IRA custodian will tell you how much you must withdraw each year. They already know because the amount is based on the value of the account at the end of last year!
And those amounts will be taxed as ordinary income — on top of any other income you receive (Social Security, pension, dividends, interest, etc).
It is what it is! No planning or strategy to do around this income — EXCEPT you must plan for taxes.
Likely you should have taxes withheld from your RMDs. A tax preparer can tell you what your total tax liability will be — how much you must pay in to avoid penalties. This isn’t rocket science!
But now is the time to do that — before the end of the year when tax preparers get busy.
If you don’t have a CPA, ask at your local bank or chamber of commerce for a recommendation. Total up all your expected income for this year, including any RMDs. Then contact the CPA and ask how much you must pay either in quarterly estimated taxes (first estimate due in January) — OR if you haven’t taken those RMDs yet, how much you should have withheld in taxes from the payment.
Do it now while you have plenty of time to figure it out.
