People over age 70 1/2 who hold IRA’s or other tax qualified pensions are forced by Uncle Sam to withdraw a percentage of these accounts each year. Since this money has likely been tax sheltered for decades, the government wants the opportunity to tax it before the person passes away. Most know this as the RMD or Required Minimum Distribution.
Many people, still wishing to avoid taxes on the monies withdrawn, look for a way to put it back somewhere it will not be taxed. This is difficult, since putting it back in the IRA may not be possible, since the person may not be working anymore and the money is just going to be given back to that person later in the same year to be taxed again.
Still, there are some solutions to minimize the tax bite on these forced out funds….
Please click the link below for a short video.