Kenney & MacDonald, Inc. has been in business for over 25 years. Situated in Sharon Center we are easily accesible to both Providence and Boston area clients. Kenney & MacDonald offers a wide range of accounting and taxation services, including tax preparation for individuals and corporations, non-profit tax returns, estate tax returns, as well as bookkeeping, payroll, and other tax planning services. We offer carefully researched, relevant advice to meet your financial and accounting needs.
Our philosophy: Quality, experience, commitment and the clients' trust form the foundation of our success.
IRA 2014 Year-End Reminders
Individual Retirement Accounts are a great way to save for retirement. Here are some reminders for 2014.
Review the 2014 IRA contribution and deduction limits to make sure you’re taking full advantage of the opportunity to save for retirement. You can contribute up to $5,500 ($6,500 if you are age 50 or older by the end of 2014) or your taxable compensation, if less, to a traditional or Roth IRA. However, you may not be able to deduct your traditional IRA contributions if you or your spouse is covered by a retirement plan at work and your income is above a certain level. If you file a joint return, you and your spouse can each make IRA contributions even if only one of you has taxable compensation. You have until April 15, 2015, to make an IRA contribution for 2014.
• Excess contributions
If you’ve exceeded the 2014 IRA contribution limit, you should withdraw the excess contributions from your account by the due date of your 2014 tax return (including extensions). Otherwise, you must pay a 6 percent tax each year on the excess amounts remaining in your account.
You may be able to take a retirement savings contribution tax credit (Saver’s Credit) of up to $2,000 ($4,000 if filing jointly) for your contributions to either a traditional or Roth IRA. The amount of the credit you can get is based on the contributions you make and your credit rate. Your credit rate can be as low as 10 percent or as high as 50 percent. Your credit rate depends on your income and your filing status. To determine your credit rate and claim the credit, complete and attach Form 8880, Credit for Qualified Retirement Savings Contributions, to your 2014 tax return.
Required minimum distributions
If you’re 70½ or older, you must take a required minimum distribution from your traditional IRA by Dec. 31, 2014 (April 1, 2015, if you turned 70½ in 2014). You can calculate the amount of your RMD by using these RMD worksheets. You must calculate the RMD separately for each of your traditional IRAs, but can withdraw the total amount from one or more of them. You face a 50 percent excise tax if you don’t take your RMD on time. Roth IRAs do not require withdrawals until after the death of the owner.
New IRA one-rollover-per-year rule
Beginning in 2015, you can make only one rollover from an IRA to another (or the same) IRA in any 12-month period, regardless of the number of IRAs you own. You can, however, continue to make as many trustee-to-trustee transfers between IRAs as you want. You can also make as many rollovers from traditional IRAs to Roth IRAs ("conversions") as you want. In calculating the 12-month period, IRA distributions rolled over to another (or the same) IRA in 2014 will not prevent a 2015 distribution from being rolled over if the 2015 distribution is from a different IRA than those involved in the 2014 rollover.
NOTE TO EDITOR: Below are helpful resources on retirement topics found on IRS.gov.
• FAQs: IRAs – answers to questions on the various IRA rules and requirements.
• FAQs: Required Minimum Distributions – answers to common questions about the RMD rules and requirements.
• IRA One-Rollover-Per-Year Rule – explains how the new rollover rule effective in 2015 is different from the rule in prior years.
On Twitter? Send these Tweets:
• Read how to save for your #retirement using a traditional and #Roth #IRA http://go.usa.gov/fhrQ #IRS
• Learn when and how much you must withdraw from your traditional #IRA http://go.usa.gov/fhY5 #IRS
"The avoidance of taxes is the only intellectual pursuit that still carries any reward."
-John Maynard Keynes
Our clients range from individual clients to businesses with millions of dollars in revenue. We like to help people achieve their financial goals, no matter how small or big that goal may seem.
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Kenney & MacDonald, Inc.
18 E Chestnut St
Sharon, MA 02067