Tax Prep: New Laws & Recent Changes to Help You File

Here at The Center, we think of tax season as the most magical and exciting part of the year, but you might not see it that way.  As you prepare to get your taxes in order, it is important to discuss some of the new laws going into effect for 2014 and to revisit some changes from 2013. Earlier this month, Matt Trujillo and Nick Defenthaler attended a portion of the University of Michigan tax seminar to brush up on the ever-changing landscape in the world of taxes.  Below are a few key points that they felt may impact you:

Expiring Provisions in 2014

• Deduction for expenses of elementary and secondary school teachers

• Option to deduct state and local general sales taxes

• Tax credit for energy efficient home goods (windows, doors, appliances, furnaces, etc.)

  • Don’t let home improvement sales people lead you to believe that the new product they are trying to sell you will generate a tax credit!

  • Elimination of private mortgage insurance (PMI) deduction

    • Consider checking a website such as Zillow or consult with a real estate agent to get an idea of what your home may now be worth.  With the housing market improving, you may now have greater than 20% equity in your home.  Consult with your lender to determine the best steps to eliminating your PMI. 

Reminder of changes from 2013

In 2013, the Medicare tax changes went into effect for “high income earners” based on certain thresholds:

• Single – Modified Adjusted Gross Income (MAGI) greater than $200,000

• Married Filing Jointly – Modified Adjusted Gross Income (MAGI) greater than $250,000

This tax has two components, one based on wages earned above the thresholds and another based on net investment income above the thresholds.

• 0.9% additional Medicare tax on wages above thresholds

• 3.8% tax on the lesser of total net investment income or the amount of earnings above the thresholds (net investment income consists of dividends, interest, capital gains, rental income, etc.  It does NOT include distributions from qualified retirement plans such as an IRA or 401k)

• Ex.  A married client’s MAGI for 2013 is $300,000.  They also have $20,000 of net investment income.  They are $50,000 over the $250,000 threshold.  However, the $20,000 is less than the $50,000 overage; therefore, the 3.8% tax is based on the $20,000, resulting in an additional tax of $760 ($20,000 x 3.8%). 

Affordable Care Act (Obamacare)

One of the biggest tax talking points for 2014 are the tax ramifications of the Affordable care act or “Obamacare”. A few key take-aways for 2014:

• it's widely known that the penalty (in 2014) for not having insurance is the greater of $95 or 1% of income - this penalty will increase for the next several years to entice people to get health insurance.

• For those individuals or families that are between 100% and 400% of the federal poverty level, you may qualify for a government subsidy to help offset your insurance premium costs.

• In 2014 you will need to use a combination of last year’s earned income, and your projections of this year’s income to figure out whether or not you qualify.

• If you find you are right on the cusp of qualifying for a subsidy, but are concerned about having to pay back the subsidy in full if you underestimate your income ... fear not!  The rules regarding income are a “cliff”, meaning if you are wrong by $1 dollar you are subject to a penalty. However, the maximum penalty for 2014 is $400.

Example: Joe and Jane are 55 with no dependents.  They estimate their income to be $62,000 and that qualifies them for a government subsidy.  However, Joe gets an unexpected bonus at the end of 2014 and his income ends up being higher than 400% of the federal poverty level.  In this scenario, Joe and Jane will be subject to a maximum $400 penalty.

Tax planning can be very confusing, especially since the IRS seems to change the tax code more often than electronics companies push new products.  Please don’t hesitate to contact us if you have questions about your personal tax situation. Although we are not CPAs, we can still help to make your overall financial plan as tax efficient as possible and work together as a team with your tax professional to ensure we are all on the same page.

Nick Defenthaler, CFP® is a Support Associate at Center for Financial Planning, Inc. Nick currently assists Center planners and clients, and is a contributor to Money Centered and Center Connections.

Matthew Trujillo is a Registered Support Associate at Center for Financial Planning, Inc. Matt currently assists Center planners and clients, and is a contributor to Money Centered.

The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Center for Financial Planning, Inc. and not necessarily those of RJFS or Raymond James. Please note, changes in tax laws may occur at any time and could have substantial impact upon each person’s situation. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. All examples are hypothetical. Please consult the appropriate professional if you have questions about these examples and how they relate to your own financial situation. C14-002577

How to Make Net Unrealized Appreciation Work for You

The financial planning profession is full of acronyms such as RMD, IRA, TSA and NUA.  One acronym making a comeback due to the increase in the US Equity market is “NUA”.  NUA stands for net unrealized appreciation and anyone with a 401k account containing stock might want to better understand it.  NUA comes into play when a person retires or otherwise leaves an employer sponsored 401k plan.  In many cases, 401k funds are rolled over to an IRA.  However, if you hold company stock in the 401k plan, you might be best served by rolling the company stock out separately. 

Before getting to an example, here are the gory details: The net unrealized appreciation in securities is the excess of the fair market value over the cost basis and may be excluded from the participant's income. Further, it is not subject to the 10% penalty tax even though the participant is under age 59-1/2, since, with limited exceptions; the 10% tax only applies to amounts included in income.  The cost basis is added to income and subject to the 10% penalty, if the participant is under 59.5 and the securities are not rolled over to an IRA.

Suppose Mary age 62 works for a large company that offers a 401k plan.  Over the years she has purchased $50,000 of XYZ company stock and it has appreciated over the years with a current value of $150,000.  Therefore, Mary has a basis of $50,000 and net unrealized appreciation of $100,000. 

If Mary rolls XYZ stock over to an IRA at retirement or termination, the full $150,000 will be taxed like the other funds at ordinary income tax rates when distributed.  However, if Mary rolls XYZ stock out separately the tax rules are different and potentially more favorable.  In the example above, if Mary rolls XYZ out she will pay ordinary income tax immediately on $50,000 but may obtain long term capital treatment on the $100,000 appreciation when the stock is sold; thus potentially saving several thousand dollars in income tax.

A NUA transaction is complex so care and professional guidance is encouraged.   

Timothy Wyman, CFP®, JD is the Managing Partner and Financial Planner at Center for Financial Planning, Inc. and is a frequent contributor to national media including appearances on Good Morning America Weekend Edition and WDIV Channel 4 News and published articles including Forbes and The Wall Street Journal. A leader in his profession, Tim served on the National Board of Directors for the 28,000 member Financial Planning Association™ (FPA®), trained and mentored hundreds of CFP® practitioners and is a frequent speaker to organizations and businesses on various financial planning topics.

The information contained in this report does not purport to be a complete description of the securities, markets or developments referred to in this material, is not a complete summary or statement of all available data necessary for making an investment decision, and does not constitute a recommendation.  The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete.  Any opinions are those of Center for Financial Planning, Inc., and not necessarily those of RJFS or Raymond James.  You should discuss any tax or legal matters with the appropriate professional.

Is Too Much Success a Penalty at Tax Time?

Many investors have been so successful they may face a potentially hefty tax bill for 2013.  This bull market we are experiencing in the U.S. has had such strong legs for a long period of time many investors have few, if any, capital losses to harvest to help offset the gains they have accumulated in their equity investments. In some ways this is a great problem to have. 

Tax Increases

This year there were a couple of noteworthy tax increases to keep in mind.  The maximum tax rate on capital gains has increased from 15% to 20%.  Taxpayers with taxable income north of $400,000 ($450,000 for couples) will be affected by this increase.  There is also the new Medicare investment income “surtax” affecting taxpayers with modified adjusted gross income over $200,000 ($250,000 for couples).  This tax is an additional 3.8% on investment income (interest, capital gains, dividends etc.).

Look for Bond Losses

Some taxpayers may still have tax losses from 2008-2009 to help offset gains, but for many these have run out during the successful run the markets have enjoyed for the past 4 ½ years.  One place to look for some losses this year may be in the bond portion of your portfolio (if applicable).  There may be an opportunity to swap to a similar investment for a short period of time, at least 31 days, to harvest those losses to help offset other gains you may have. 

Harvesting Losses

Make sure you are reviewing your portfolio throughout the year for tax losses to harvest.  Bond losses were at their peak during late summer and into the fall, but if you wait until December to harvest those losses, they could be much diminished from what they were.  The end of the year is rarely the best time of the year to harvest tax losses.  Personal circumstances vary widely so it is critical to work with your tax professional and financial advisor today to prepare for the risk of higher taxes in your future.

Angela Palacios, CFP®is the Portfolio Manager at Center for Financial Planning, Inc. Angela specializes in Investment and Macro economic research. She is a frequent contributor to Money Centered as well asinvestment updates at The Center.

The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material.  The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete.  Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation.  Any opinions are those of Center for Financial Planning, Inc., and not necessarily those of RJFS or Raymond James.  You should discuss any tax or legal matters with the appropriate professional.

2013/2014: Key Financial Planning Numbers

 As we approach year-end (yes, already!), it is time to determine what needs to be done to reach your 2013 financial goals AND start preparing for 2014.  The 2014 Contribution and Annual Gifting Limits were recently released, and they remain unchanged from 2013 limits.  Here is summary of the existing limits for your reference.

If you haven’t completed your retirement plan contributions or gifting for 2013, find time to connect with your financial planner to make sure you meet the appropriate deadlines.  And make plans now to coordinate with your planner to set your 2014 goals!

Sandra Adams, CFP® is a Financial Planner at Center for Financial Planning, Inc. Sandy specializes in Elder Care Financial Planning and is a frequent speaker on related topics. In 2012 and 2013, Sandy was named to the Five Star Wealth Managers list in Detroit Hour magazine. In addition to her frequent contributions to Money Centered, she is regularly quoted in national media publications such as The Wall Street Journal, Research Magazine and Journal of Financial Planning.

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Five Star Award is based on advisor being credentialed as an investment advisory representative (IAR), a FINRA registered representative, a CPA or a licensed attorney, including education and professional designations, actively employed in the industry for five years, favorable regulatory and complaint history review, fulfillment of firm review based on internal firm standards, accepting new clients, one- and five-year client retention rates, non-institutional discretionary and/or non-discretionary client assets administered, number of client households served.

Deducting Investment Management Fees & Medicare Surtax: Note for Higher Income Earners

 High earners beware! Thanks to the new Medicare Surtax deducting investment management fees becomes even more complicated.

This potentially applies if you are:

• Single earning more than $200,000
• Married filing jointly earning more than $250,000

In a blog last year I explained the grey area of deductibility of investment management fees. In general, investment management fees paid in taxable accounts (such as single, joint or living trust accounts) are a tax deductible expense and reported as a Miscellaneous Itemized deduction on Schedule A of Form 1040. However, this only benefits taxpayers whose Miscellaneous Itemized deductions exceed 2% of their Adjusted Gross Income.

But the new Medicare Surtax further fogs up this grey area. The basic rule is that investment management fees are deductible against the 3.8% Medicare surtax on net investment income.  However, the 2% “rule” still applies, and to further complicate the issue, the deduction amount must be prorated if you have other miscellaneous deductions. 

The good news is that for those working with a professional tax preparer you may not even notice the fog. You will want to continue to provide your tax preparer your yearend tax report from your brokerage firm (such as Raymond James) which contains the necessary information on investment management fees. For those preparing their own tax return, the IRS has stated that they will be providing special IRS forms to assist in the calculation early next year.

As always, if you need help getting through the maze, give us a call. 

Timothy Wyman, CFP®, JD is the Managing Partner and Financial Planner at Center for Financial Planning, Inc. and is a frequent contributor to national media including appearances on Good Morning America Weekend Edition and WDIV Channel 4 News and published articles including Forbes and The Wall Street Journal. A leader in his profession, Tim served on the National Board of Directors for the 28,000 member Financial Planning Association™ (FPA®), trained and mentored hundreds of CFP® practitioners and is a frequent speaker to organizations and businesses on various financial planning topics.

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The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete.  Any opinions are those of Center for Financial Planning, Inc., and not necessarily those of RJFS or Raymond James.  Please note, changes in tax laws may occur at any time and could have substantial impact upon each person’s situation.  While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters.  You should discuss tax or legal matters with the appropriate professional.

Step Up in Basis Part 2

In Part 1, we covered a “step up in cost basis” principles with regards to real estate. In this post we will address step up in basis rules pertaining to marketable securities such as stocks, bonds, and mutual funds.

Your cost basis in a security is what you initially purchased it for plus any reinvested dividends.  So if mom bought 1,000 shares of Ford Motor Company back in 1980 when it was trading at $1.00 a share her cost basis is exactly $1,000 (trading costs such as commissions can also be included).   As of 10/25/2013 Ford was trading at $17.60 a share so if mom sold it today she would receive $17,600 from the sale of the Ford stock.  She would be able to subtract her basis for tax purposes ($1,000) and she would have a long term realized capital gain of $16,600.  At today’s long-term capital gains rates mom would owe Uncle Sam as much as 20% of that gain or $3,320.  However, let’s say mom never sold her Ford stock and left it to you after her death.  If mom died on October 25th 2013 your new inherited basis would be the closing market price of Ford on the date of death ($17.60).  Assuming you sold Ford stock at $17.60 you would owe nothing in capital gains thanks to the step up in basis rule.  Please remember that this analysis is only relevant if you are inheriting assets in a taxable account. If you are inheriting Ford stock inside of an IRA (or other similar tax deferred account) then the cost basis is irrelevant – at least for income tax purposes. 

What if mom is feeling generous and decides she wants to gift you the shares of Ford Stock while she is alive?  In this instance you would also receive mom’s cost basis of $1.00 rather than the higher step up in basis at death. 

As always, income tax consequences alone should not dictate financial decisions.  However, care should be taken to maximize both gifts and inheritances. Please speak with a financial advisor about cost basis and other tax-related issues.

Matthew Trujillo is a Registered Support Associate at Center for Financial Planning, Inc. Matt currently assists Center planners and clients, and is a contributor to Money Centered.

The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete.  Any opinions are those of Center for Financial Planning, Inc., and not necessarily those of RJFS or Raymond James.  Please note, changes in tax laws may occur at any time and could have a substantial impact upon each person’s situation.  While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters.  You should discuss tax or legal matters with the appropriate professional.  The illustration is hypothetical.  Individual results will vary.  This information is not intended as a solicitation or an offer to buy or sell any security referred to herein.  Individual results will vary.   This information is not intended as a solicitation or an offer to buy or sell any security referred to herein.  Center for Financial Planning, Inc., Raymond James Financial Services, Inc., its affiliates, officers, directors or branch offices may in the course of business have a position in any securities mentioned in this report.

Step Up in Basis Part 1: A Key to Understanding Your Inheritance

If you stand to inherit assets, it is crucial that you get the gist of the often-misunderstood concept of step up in basis. This is an area that is more pertinent then ever before as the aging U.S. population looks to transfer a large amount of wealth to the next generation.  The rules are a little different depending on what type of asset you are dealing with, but this blog is going to focus on “real assets” such as property.

In order to fully understand this topic, you need to know what cost basis means.  Your cost basis is simply how much you paid for something.  If you bought some land for $10,000 then your cost basis in the property is $10,000.  If that property appreciates in value and you sell it for $100,000 then you have realized a $90,000 capital gain.  The IRS allows you to subtract the original $10,000 (your cost basis) from the $100,000 sale price because you already paid tax on the $10,000.

Next you need to understand what step up in basis means.  A step up in basis typically occurs when somebody dies and leaves assets to their heirs.  Using our land example again, let’s say that Mom bought a property back in 1960 for $10,000 and left it to you in her will when she died.  The fair market value upon Mom’s death is $100,000.  If Mom sells the property the day before she died she would have a $90,000 capital gain.  However, if Mom leaves the property to you in her will, and you decided to sell it the day after the funeral, you would pay no capital gains tax on the sale proceeds.  The reason for this is that the IRS gives you a full step up in basis at the date of death.  So the $10,000 cost basis that represents the property’s original purchase price is now stepped up to the current market value of $100,000.

In our next blog, we will focus on step up in basis when you are dealing with securities such as stocks, bonds, mutual funds, etc.

Matthew Trujillo is a Registered Support Associate at Center for Financial Planning, Inc. Matt currently assists Center planners and clients, and is a contributor to Money Centered.

The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete.  Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation.  Please note, changes in tax laws may occur at any time and could have a substantial impact upon each person’s situation.  While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors, of RJFS, we are not qualified to render advice on tax or legal matters.  You should discuss tax or legal matters with the appropriate professional.

Demystifying the Gift Tax

 Recently we have been receiving quite a few inquiries from parents looking to gift money to their children.  People may give for various reasons, but one of the most common reasons we have heard lately is for a down payment on a first home.  There seems to be a lot of confusion about how much can be gifted annually without being subject to the “gift tax”.

For 2013, the Annual Gift Exclusion Amount is $14,000

What this means is you can gift $14,000 in 2013 to your son, daughter, niece, nephew, neighbor, or a random guy on the street. You can give EACH of them $14,000.  The $14,000 gift does not have to go to a member of your immediate family (they don’t even have to be related to you at all for that matter).  If you are married, then you and your spouse can each give $14,000 to anyone you chose without being subject to gift tax.  Just to be clear, that means if you are married you can gift $28,000 to anyone you want in 2013 and pay nothing in gift tax on that gifted money.  Also, it doesn’t have to be cash. You can also gift stocks, bonds, property, artwork, etc.

Now is where things get a little trickier...

Let’s say that you want to give your son $50,000 for whatever reason.  So you and your spouse each gift $14,000 for a total of $28,000.  That leaves $22,000 remaining that you need to transfer to your son.  How can you get him that money without being subject to gift tax? Simply gift him the additional $22,000 and file IRS form 709 and potentially pay no tax on the additional gift!  Notice I did say “potentially” no gift tax.  For those of you that intend to give more then $5.25 million there could be some gift tax liability. However, for those of you reading this who never intend to give away that much, you shouldn’t be subject to any gift tax on the additional $22,000. 

A little history on why this works: Prior to 1976 wealthier people that were looking to avoid paying estate taxes at their death found a way to circumvent the estate tax by simply gifting assets to their heirs while they were still alive. In 1976 congress “unified” the estate and gift tax law so that any gifts you made during your lifetime over the annual exclusion amount ($14,000 in 2013) would count towards your lifetime exclusion amount. In 2013 the lifetime exclusion amount is $5.25 million per person.  So a married couple could gift $10.5 million over their lifetime without paying gift tax. 

So, John and Jane Doe could gift $50,000 to their son outright and not pay any gift tax on the entire amount. The first $28,000 would fall under the annual exclusion amount and the remaining $22,000 would be applied to their lifetime exclusion amount of $10.5 million. Based on the current laws of 2013 John and Jane would have $10,478,000 left of their lifetime exclusion.

Consult with a qualified tax professional and your financial advisor for help navigating the gift tax.

For additional information please refer to IRS publication 950. The link is included below: http://www.irs.gov/uac/Publication-950,-Introduction-to-Estate-and-Gift-Taxes-1

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The information contained in this report does not purport to be a complete description of the subjects referred to in this material.  The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete.  The example provided is hypothetical and for illustration purposes only.  Actual investor results may vary.  Please not, changes in tax laws may occur at any time and could have a substantial impact upon each person’s situation.

Debt: Just Another Four-Letter Word

 Is DEBT a four-letter word? It doesn’t have to be – but managing (notice I didn’t say avoiding) credit and loans is an important component in building and maintaining wealth. Clients that have worked with us over the years know that as comprehensive planners, we are trained to view our clients’ entire balance sheet or net worth statement. A quick refresher: Your net worth consists of both assets (investments, savings, etc.,) AND liabilities/debts (home mortgage, auto loans, etc.). You can help improve your net worth or wealth by adding to investments and/or reducing liabilities. Therefore, we work closely with clients to track and analyze their net worth each year as one measurement of overall financial health.

Debt doesn’t have to be one of those bad, four-letter words if used and managed properly. Financing a house can be a good lifestyle decision as well as a smart financial transaction. Certainly today’s low interest rate environment makes it more compelling to wisely use debt or leverage.

For example, Sue and Steve are 45 years old and currently desire to retire in 15 years. “Retire” to them means working for a charitable organization that they are passionate about…perhaps earning some wages…perhaps not.  Essentially, they would like to be Financially Independent at the end of 15 years. Ideally, clients such as Sue and Steve plan to also retire their mortgage over the next 15 years. However...

Utilizing mortgage debt over the next 15 years can be a good financial strategy:

1. Interest rates are historically low, giving them a better opportunity (not guaranteed) to earn higher returns on their retirement savings.

2. There is an income tax benefit for mortgage interest paid.

3. The mortgage payments are a forced savings mechanism. 

Depending upon their overall situation, we might even suggest a 30-year mortgage and that they invest the difference between the 30 and 15-year payments for additional flexibility. As always, each situation is different and you should consult the appropriate professionals.

In summary, our experience suggests that clients’ eliminate debt, including home mortgage debt, at or near retirement.  At retirement, the name of the game becomes “cash flow” and not having to service debt payments goes a long way in living a successful retirement. 

Timothy Wyman, CFP®, JD is the Managing Partner and Financial Planner at Center for Financial Planning, Inc. and is a frequent contributor to national media including appearances on Good Morning America Weekend Edition and WDIV Channel 4 News and published articles including Forbes and The Wall Street Journal. A leader in his profession, Tim served on the National Board of Directors for the 28,000 member Financial Planning Association™ (FPA®), trained and mentored hundreds of CFP® practitioners and is a frequent speaker to organizations and businesses on various financial planning topics.

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Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation.  Any opinions are those of Center for Financial Planning, Inc., and not necessarily those of RJFS or Raymond James.  Investing involves risk and investors may incur a profit or a loss.

The Magic Age of 70 ½ and Your Required Minimum Distributions

 You could call it a rite of passage … one about which you have little choice. Taking a Required Minimum Distribution from your traditional IRA can’t be sidestepped or avoided without federal tax penalty.  The IRS keeps a watchful eye on distributions and navigating through the ins and outs is a must for all retirees who reach the magic age of 70 ½.  To complicate matters, SEP IRAs and SIMPLE IRAs are also subject to the same RMD rules.  On the flip side, Roth IRAs are an exception as no distributions are required during your lifetime. 

What is a Required Minimum Distribution(RMD)? 

• A specific minimum dollar amount that must be withdrawn every year after age 70 ½.  This number will change every year as account values change and life expectancy factors change.  RMDs are calculated by dividing your traditional IRA or retirement plan account balance (as of December 31 of the year prior to the calendar year during which the distribution must be made) by a life expectancy factor specified in IRS tables.  
• You can always withdraw MORE, but if you withdraw LESS you will be subject to federal penalty.
• RMD rules are designed to spread out IRA account distributions over your lifetime. 

Here’s the question I get asked most about RMD’s: “When must it be taken?” 

The short answer is the year you reach age 70 ½.  However, questions usually pop up because the RMD can be taken during the year you reach 70 ½ OR you can delay it until April 1st of the following year.  

For example: 

• Your 70^th birthday is December 2, 2012, so you will reach 70 ½ in June of 2013.
• You can take your first RMD during 2013, or you can delay it until April 1, 2014. 
• If you choose to delay until 2014, you will have to take two distributions during 2014 – one for 2013 and one for 2014.   

From a financial planning perspective, you might delay taking your first distribution if you expect to be in a lower income tax bracket in the following year, perhaps because you’re no longer working or will have less income from other sources.  On the other hand, receiving your first and second RMDs in the same year will increase income and could possibly push you into a higher federal income tax bracket for that year.  So the decision about whether to delay your first required distribution can be important, and should be based on your personal tax situation.

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This post contains general information meant to raise awareness of the importance of taking Required Minimum Distributions even if you don’t need or want the income.  Since RMD rules are very specific and IRS penalties punitive, my advice is to talk with your financial advisor or tax preparer to ensure you are meeting the annual distribution requirement.