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Taking advantage of this may be the best way to pay less in taxes on your inherited retirement account. For example, say you inherit a traditional IRA with $100,000 in it.
An inherited IRA may be taxable, depending on the type. If you inherit a Roth IRA, you’re free of taxes. But with a traditional IRA, any amount you withdraw is subject to ordinary income taxes.
For example, if you’re in the 22% tax bracket and you inherit an IRA worth $50,000, you’ll owe $11,000 in taxes at the federal level alone – and that doesn’t even include state taxes.
Inheriting an IRA isn't quite as simple as taking the money and going on your way. Since an IRA is a tax-advantaged vehicle, you'll have to strategize how to maximize the value of the account ...
They can treat the inherited IRA as their own, or take distributions based on their life expectancy. These new rules do not apply to accounts inherited before 2020, or to Roth IRAs. This story was ...
Now, as Forbes noted, if you have inherited a traditional IRA in 2020 or later, the Treasury Department has made it obligatory to take annual distribution payments in years 1 through 9, followed ...