April 5, 2011 — Our friend Robert Powell over at WSJ MarketWatch never fails to publish a useful and interesting article about retirement planning. His latest, “Five Retirement Plan Tax Mistakes to Avoid“, is well worth the read. Here are the 5 mistakes:
1. Fund your 2010 Required Minimum Distribution (RMD) from your IRAs. If you haven’t done it already, he tells you how to mitigate….
2. Fund your 410k, IRA, Roth, or SEP retirement accounts. What you salt away might help reduce your taxable income, either now or in the future.
3. Get the Savers Credit. Individuals filing jointly/married with income up to $33,500 might be eligible for up to $1000 in a Savers Credit for certain retirement contributions.
4. File to the correct retirement account. If you have a Roth and a non-deductible IRA, make sure you contribute to the correct account. It makes a difference, as ROTH IRA distributions are usually non-taxable.
5. Pay your estimated taxes. If you had some extraordinary income you might be required to make estimated payments. This is particularly true if you were involved with a ROTH IRA conversion.
Comments. This article is a very skeletal overview of Robert’s excellent article. Read the his full article for more helpful advice. Please feel free to add your Comments below.