Did you make these IRA mistakes?
The rules for IRAs are pretty straightforward, but sometimes people forget. Watch out for these common mistakes:
Did you put in enough? The more you put in, the more you can deduct—up to $5,500 this year and as much as $6,500 if you were born before 1961.
Missed a deadline? You actually have until tax-filing deadline—usually April 15—to make a contribution. Don't put it off.
What kind of rollover? If you've changed jobs and want to roll over your employer's retirement plan to your IRA, be sure it's a direct rollover. If you touch the money, there's a 60-day rollover deadline and a 20-percent mandatory withholding tax.
Take the money out too soon? Keep the account intact until you are 59 1/2, or you'll pay a 10-percent penalty on top of the usual taxes on the withdrawal. (At age 70 1/2, of course, you will HAVE to start taking a required minimum distribution.)
For nearly 30 years, Mike Nickerson has owned and managed a small, full-service accounting practice in the Midcoast. He holds a bachelor's degree in accounting from University of Southern Main and a master's degree in financial planning from Bentley University.
He is a past board member and president of the Maine Society of Certified Public Accountants and currently serves on the Maine Board of Accountancy.
An aged rock musician, Nickerson now finds musical enjoyment playing upright and electric bass in a variety of bands spanning folk to jazz music genres. He and his wife have three grown children, and they enjoy their free time hiking, kayaking, golfing, bicycling and motorcycling.
