Whether you are still working or retired, you should periodically review your IRAs. Here are few things to remember about year end IRA tips for 2016.
IRA Contribution limits
If you’re still working, review the 2016 IRA contribution and deduction limits to make sure you are taking full advantage of the opportunity to save for your retirement. You can make 2016 IRA contributions until April 18, 2017.
IRA Excess contributions
If you exceed the 2016 IRA contribution limit, you may withdraw excess contributions from your account by the due date of your tax return (including extensions). Otherwise, you must pay a 6% tax each year on the excess amounts left in your account.
IRA Required minimum distributions
If you are age 70½ or older this year, you must take a 2016 required minimum distribution by December 31, 2016 (by April 1, 2017, if you turned 70½ in 2016). You can calculate the amount of your IRA required minimum distribution by using our Worksheets. You must calculate the required minimum distribution separately for each IRA that you own other than any Roth IRAs, but you can withdraw the total amount from one or more of your non-Roth IRAs. Remember that you face a 50% excise tax on any required minimum distribution that you fail to take on time.