2014 Annual Statement & Tax Documents
Statements for the period ending 12/31/14 will be available by January 31st. This statement is an annual consolidated statement that includes a full-year summary. If you have online access to your account, please take note that your quarterly statements for the first, second, and third quarters will be replaced by the annual statement.
The annual statement will serve as your substitute Form 5498. The information that will appear on your substitute Form 5498 (contributions, rollovers, account valuation) will be furnished to the Internal Revenue Service.
If you took a distribution, did a Roth conversion, or had any other taxable transaction, you will receive a Form 1099R which will be issued by January 31st.
Required Minimum Distributions (RMDs)
If you are over 70 1⁄2 or will turn 70 1⁄2 this year, you will receive notification letters and reminders indicating the amount of your required minimum distribution. For investors who turned 70 1⁄2 in 2014, the deadline to receive your RMD is April 1st 2015. If you are turning 701⁄2 this year, your deadline is April 1st 2016. Please note that if you have an IRA at another financial institution, you may take your RMD from that IRA account should you wish to do so.
If you choose to take your RMD from your IRA Services account, please send in your request so that your distribution is issued to you prior to the deadline. If your request entails a liquidation and/or an in-kind distribution, please send your request now (preferably by February 1st) to allow enough time to process the liquidation and/or re-registration by April 1st.
For investors who were over the age of 70 1⁄2 prior to December 31, 2013, the deadline to receive your RMD is December 31, 2015. Please send us your request as soon as possible, but no later than December 15. 2015. Failure to provide your request to us in a timely manner may result in your distribution not being issued by the deadline. As a result, you may face penalties from the IRS.
For more information on requesting a distribution, please call us at 1-800-248-8447 or send an email to info@iraservices.com.
Valuations
For investors who hold Real Estate and/or IRA LLCs in their account, the deadline to submit your valuation so that it appears on your 2014 year-end statement was January 12, 2015.
If you submitted your valuation after January 12, your new fair market value will be reflected on your first quarter statement for 2015.
For investors who hold other asset types, please contact your investment provider to ensure that they have provided us with the fair market value of your asset(s).
Reminders About Statements and Fees
Go Paperless today
Beginning with your March 2015 statement, a $5.00 per paper statement fee will be charged each quarter. To avoid this cost, you may elect to download your statements from our website. To elect to go paperless, visit our websitewww.iraservices.com, log into your account, and change your delivery method under the Statement Section in the lower left corner of the display. If you don’t have an online account and wish to establish one, submit an Internet Access Request form available on our website www.iraservices.com under the Forms & Fees tab. Should you require any assistance, send an email to info@iraservices.com or call Customer Service at 800-248-8447.
Remember, if you wish to pay account fees due in 2014, you must do so by January 31, 2015. Funds received after this date may be returned to you. To pay your account fees, please send a check made payable to “IRA Services Trust Company” indicating the total amount of fees to be paid. You may only pay 2014 fees which have not already been paid by you.
Consider the benefits of a Roth IRA
Roth IRAs are designed to leave more money in your hands down the road. Establishing a Roth IRA now, or converting some of your Traditional IRA, may save you money in taxes, especially over longer periods, growing yourself a bigger nest egg.
Qualified Distributions are tax-free
Once you are over the age of 59 1⁄2, if you have held a
Roth IRA for at least 5 years, those funds can be distributed tax-free. Funds held in a Roth IRA, unlike the Traditional IRA, are not subject to mandatory withdrawals starting at age 70 1⁄2, so you are free to maintain the balance of funds in your Roth IRA after the age 70 1⁄2 milestone.
Converting money from Traditional IRA to Roth IRA will reduce the amount remaining in Traditional IRAs that is subject to Required Minimum Distributions.
No eligibility age limit for contributions
New contributions to your Roth IRA are still permitted after 701⁄2, as long as you have earned income. If your income exceeds $6,500 but is less than $116,000, you may be entitled to make up to the maximum contribution, including the catch-up provision of $6,500.
No RMDs for sole spousal beneficiaries
A spouse, who is the sole beneficiary of a qualified Roth IRA, may make the Roth IRA their own. Distributions from the Roth IRA would be tax free. In addition they can make new Contributions, as long as they have earned income.
A non-spouse beneficiary (or a spouse who is not the sole beneficiary) may elect to take distributions according to their own life expectancy. These too will be tax-free to the beneficiary, again assuming the original Roth IRA owner had met the criteria for qualified distributions at the time of death.
No income limits for converting to Roth IRA
Even if your earnings are too great to allow you to make new Contributions to a Roth IRA, you are allowed to make Conversions from your existing Traditional IRA to a Roth IRA without limitations. It will be taxable in the year you convert, but this could still pay off handsomely in the long run, as you may be able to keep the money working for you indefinitely, before ultimately withdrawing it tax-free. Ask your accountant or tax advisor for advice on the best option for you.
Thinking of your legacy? (Children and Grand-children)
For a parent of a child who has earned income, a Custodial Roth IRA can be a great way to teach the value of saving and investing. Besides getting a head start on saving and investing, the child can learn and see how a small investment made today, especially when repeated periodically, can grow into a significant amount over time. Later, the funds can be used for qualified higher education expenses, and up to $10,000 towards their first home purchase without tax or penalty.
While we are on the subject of legacy (children and grand-children), be sure to consider an Education Savings Account. An ESA allows you to make an annual non-deductible contribution of up to $2000 to a specially designated investment trust account, which will grow free of federal income taxes. Withdrawals from the account will generally be tax-free as well when used for qualified K-12 or college expenses.
Don’t let April 15 sneak up on you
If you missed out on, or were unable to Contribute to your IRA or Roth IRA in 2014, you are not out of luck. You can still make a Contribution for last year (2014) if we receive it or it is postmarked and dated prior to April 15, 2015. With sufficient earned income, you can still Contribute up to $5,500 (or $6,500 if 50 years of age or above) for 2014. Your account benefits from this provision, allowing you a final chance to ‘catch-up’ on 2014.
