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Individual Retirement Accounts Modification in 2014

posted Jan 17, 2015, 2:54 AM by Isla CPA   [ updated Jan 17, 2015, 2:54 AM ]
In 2014 Puerto Rico made adjustments to certain aspect of individual retirement accounts (“IRA”).   The adjustment included the ability to elect to prepay
at a reduced income tax rate of 8% all or part of their accrued and undistributed balances in IRAs (this does not include the ability to prepay for 2014 interest).
A penalty for early withdrawal of 30% (formerly a 10% penalty) - will apply to any distribution from an IRA of prepaid amounts if the holder of the IRA or its beneficiary has not attained age 60.  Under the act, there is no penalty will apply to a distribution made from an IRA to prepay the 8%.  Interest paid or accrued after June 30, 2014 will be subject to the 17% income tax rate.

There are more rules and this post contains simplifications and is not comprehensive and my be forward looking. Additionally, as always, a professional should be consulted and be presented with specific information.

 

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The information on this website is general information and is for educational use only and has not been verified for accuracy nor completeness. You, the reader, should further research your specific individual situation. In addition you should contact your accounting professional for professional advice derived from specific details from your structure and financial position.

 

IRS CIRCULAR 230 DISCLOSURE:

To comply with requirements imposed by the Department of the Treasury, Isla CPA informs you that any U.S. tax advice contained in this post (including any attachments) is not intended or written by the practitioner to be used, and that it cannot be used by any  taxpayer, for the purpose of (i) avoiding penalties that may be imposed on the taxpayer, and (ii) supporting the promotion or marketing of any transactions or matters addressed herein.

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