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2015 Planning Issues for Individuals

Overlooked tax issues

With the end of each year there are issues to be considered which vary with each individual’s circumstance.   Some overlooked issues are listed below.

Retirement Distributions:  The requirement to take minimum distributions from retirement accounts begins the year a taxpayer reaches the age of 70½. This first distribution may be delayed but no later than April 1 of the following year but, if delayed, it will mean that two distributions will be received in one year. The balances of all retirement accounts should be considered in determining the required minimum distribution; however, the distribution can be taken from one or all accounts. Failure to take the required amount can result in a penalty of 50% of the amount that was not distributed.

Medicare:  An individual becomes eligible for Medicare at age 65 even though they have not yet reached the age to receive full Social Security benefits. There is a 7 month enrollment period which is the 3 months prior to, the month of, and the 3 months following the month of obtaining age 65. If this enrollment time frame is missed, unless special circumstances apply, enrollment would take place during the general enrollment period of January 1 through March 31 of each year with coverage beginning July 1. Late enrollment may result is higher premiums for both Part A and Part B.

Beneficiaries:  Reviewing the designated beneficiaries listed for retirement accounts and life insurance proceeds should be done periodically. The designated beneficiary on the account, whomever that may be, is entitled. There have been many instances where beneficiaries should have been changed due to a change in circumstances but were not. The review should also include bank and brokerage accounts for payable upon death beneficiaries. Beneficiary designations override any instructions left in a will.



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