More Year-End Clean Up

Last week we ran down some year-end tax moves. This week we have a few more:

Required Minimum Distributions (RMDs)

If you have begun taking the required minimum distributions from your IRAs and 401(k)s, you must get the 2014 RMD out by December 31, 2014 (if you turned 70 1/2 in 2014 and this is your first year for an RMD, you have until April 1, 2014, but all subsequent years' payments must come out by December 31 each year).

If you miss the deadline, the taxes are brutal: 50% of the undistributed amount of the RMD.

For more information see IR-2014-112

529 Contributions

Though not deductible for Federal tax purposes, many states allow limited deductions for contributions to 529 plans (savings for higher education) that they sponsor from their residents (e.g. the first $8,000 contributed each year to the Missouri MOST plan is deductible for state tax purposes by Missouri taxpayers).

The deadline for these contributions is December 31.

For some ideas on how to make gifting to your child's 529 plan easy for friends & family this holiday season, see this article:

5 Ways to Get Money for College this Holiday Season