I Had No Income In 2014. Only Thing I Have Is A Little Under $1000 Rmd I Got From An Inherited Ira.

Pay tax on RMD on an inherited IRA?

Just did my 2014 tax return. Since I didn't work in 2014, I neither owe or get a refund.

I only had 1099-INT from bank, and 1099-R from the IRA.

My RMD was around $825.

My question is ... I want to take out more than the RMD for 2015. Since I don't plan to work (so, no income), how much can I take out before I would owe money from the excess (ie, going over RMD amt.)?

Withdrawals from an Inherited IRA, non-spouse?

Since your mother did not pay tax on the money that was put into the IRA, the amounts you withdraw will be taxable during the year(s) you make the withdrawals. We just went through the same thing in recent months. Our financial advisor said that each person's part of the inheritance would be divided by the number of years you are expected to live (life expectancy), and that is the MINIMUM amount you have to withdraw each year--the reason being that taxes were deferred, and the IRS expects to get their tax money from the IRA without delaying it forever. So, if your portion of the inherited IRA is $50,000 and you have another 25 years to live (according to the life expectancy for a person your age), you would divide the $50,000 by 25, which means you would be required to withdraw a MINIMUM of $2,000 per year. If you fail to withdraw the minimum amount, you can be PENALIZED half of that $2,000 each year that you fail to withdraw it, so you want to MAKE SURE that you are making your minimum withdrawals each year. There is no limit as to how much of it you can withdraw each year, as long as you withdraw the minimum. However, you may want to check and see what tax bracket you are in each year, as taking too large of an amount can put you in a higher tax bracket where each level of income would be taxed at a higher rate--see chart for 2014: http://taxes.about.com/od/Federal-Income... Good luck!

I have an inherited IRA.?

When did your mother die? If it was before 2007, then this money can no longer be in an IRA. In this case, I would need more information about how this money is now invested to answer your question.

If your mother died in 2007, then it was possible that the IRA was rolled over into your IRA.

Assume first that the account is now your own IRA. Since you are a US citizen, you are not subject to the 30% withholding rule for nonresident aliens. Your financial institution is required to withhold 10% unless you request that no withholding be taken out.

As for your income taxes, any distribution you take will be added to your other income (world-wide). You will pay US taxes based on the total of your world-wide income plus the IRA distribution. In addition, you will pay a 10% penalty on the amount of the distribution.

So if you took out $20,000, you would pay $2,000 plus your other income would increase by $20,000 and you would pay tax on the total.

Second, assume your mother recently died and you have not rolled this into your own IRA, and you are the beneficiary. Then you can take a distribution directly from her IRA. In this case, you will not pay a 10% penalty since it is a distribution from a deceased taxpayer. You would still pay income tax on the distribution, and 10% withholding would apply unless you waive it.

If this situation applies, then you can distribute the entire IRA and pay tax on all of it, or take a distribution of part of it and roll the rest into your own IRA. Keep in mind that once you roll it into your own IRA, subsequent distributions before age 59.5 are going to be subject to the 10% penalty.

I have a inherited IRA from my mom. It is in a brokerage account?

This is called a "beneficiary IRA". It should be retitled in your name but specified as a "beneficiary IRA" so the particular IRS withdrawal rules apply. You can't leave it in your mom's name, and you can't roll it into your existing IRA. You can't make any contributions to it either, it has to remain its own "pot of money".

You aren't taxed until you take withdrawals. You can either take all the money out of the inherited IRA and pay taxes on it, within 5 years of the death; or you can start taking Required Minimum Distributions annually, based on your own life expectancy.

If you leave the money in the beneficiary IRA at a brokerage firm (Vanguard, Fidelity, Schwab, etc), you can sell and buy stocks at will, within the IRA wrapper. Call the 800 number of the brokerage firm and ask for the IRA department.

I think if you didn't take your first IRA distribution by Dec. 2009, you are locked into the 5 year rule: you must take all the money out (and pay taxes on it) within 5 years of her death. Ask the IRA dept. about this:

"Non-Spousal Beneficiaries
All other beneficiaries must take and be taxed on a distribution from an inherited traditional IRA. In essence, non-spousal beneficiaries have two choices on how to take distributions.

The Lump Sum: No later than December 31 of the fifth year following the IRA owner's death, non-spousal beneficiaries may cash in the IRA without penalty, pay ordinary income taxes, and keep what's left. This distribution procedure is known as "the 5-year rule."
Little by little: Non-spousal beneficiaries may have the IRA proceeds paid out over their own life expectancies and pay ordinary income taxes on the amount distributed each year. The election to have the IRA distributed over their lifetimes must be made and implemented no later than December 31 of the year following the year of the IRA owner's death. If the election is not made by that date, then all the proceeds must be withdrawn and taxed using the 5-year rule discussed above."

I was unemployed for 2009 and have less than 1000 in income, do I need to file a tax return?

Your income is well below the filing requirement amount of any filing status for wages. Assuming that no income taxes were withheld there's no need to file.

Depending upon your age and family status it may be worth filing since you MIGHT qualify for a small payment under the Earned Income Credit. If you have dependent children you will be eligible for the EIC. If not, and you are between ages 25 and 64, there is a reduced EIC that you may be entitled to.

Not sure where one respondent gets their $600 requirement but it's not the US Tax Code. Maybe they're thinking about a state filing requirement or they are confusing the requirement of some businesses to generate Form 1099 but neither of those have anything to do with your requirement to file a FEDERAL income tax return if your income was all from wages subject to withholding, i.e. from a traditional job.

I have a question about inheriting from an IRA...?

First, my condolences.

One can not avoid taxes eventually on withdrawals from a Traditional IRA inherited or not. There are special rules for a "non-spouse beneficiary" and only a few options per the IRS. And the options could/can have been limited by the original IRA agreement or owner.

Option 1 if available is to cash it out in a lump sum distribution but that will incur an immediate tax liability and possibly at a higher tax bracket rate for some or all of it, or withdraw all distributed at least within 5 years with taxes due per each and/or any withdrawal.

Option 2 if available is to transfer ownership as a specially re-registered IRA and withdraw the funds per an IRS calculation over the beneficiary's lifetime or less thus incurring smaller distributed taxes each year.

Either way, the beneficiary must contact the current trustee, that is the bank or investment house under which the IRA is being held within certain time limits, to determine which options are available and to issue the proper documents. The first documents must re-register the account very specifically as a "non-spouse inherited IRA".

With either option, and once re-registered, the beneficiary may maintain the investment if only temporarily with that trustee or transfer it to another - and/or change the type of investment such as keep it as the CD it may be or invest it in something else.

It is generally advised to consider electing the "life-time" distribution method if available since it has no requirement that limits withdrawing more than the minimum required - so one could cash it out in 10 years if desired or within the 5 anyway.

A third option which should be discussed with an attorney and especially the estate attorney and executor is for your brother to "disclaim" all or part of the inherited IRA and then it will pass to any alternate named beneficiaries or to the general estate and then thus by the will or state probate laws - implication being to someone else (but no longer your brother) in a possibly/probably lower tax bracket.

Confirm all that I have written, google "inherited IRA rules" or consult the estate attorney, or a professional financial adviser (and do the same for anything anyone else suggests), before making any financial decisions.

'_'

CAN someone with no income file taxes?

If the children's other parent has NO income, there would be no benefit to filing taxes. I believe you might be able to claim the children for dependency only (which would allow you to subtract $6,800 from your income for these two children (in addition to your standard or itemized deduction plus other personal exemptions to which you are entitiled.)

The rules of who is and who isn't a "taxpayer" for purposes of determining whether a exemption can be taken for qualifying child and qualifying relative have just been "clarified" so that your spouse in no longer a "taxpayer."

Since she isn't required to file at all and wouldn't receive any tax benefit, there is a good chance you might be entitled to claim the children as your qualifying relatives since their are your children, they didn't make over $3,400 each in 2007, you provided over 50% of their support and their mother isn't technically a taxpayer. You wouldn't be entitled to refundable credits, however, such as EITC or EIC under these circumstances, just the exemption.

However, if the children were also living with someone else who could claim their dependency and benefits as "qualifying children" (such as their grandmother or aunt), you might not win a dispute if the IRS determined the other person had a higher claim from having the children as their qualifying child for tax purposes than you did from having them as qualifying relatives. I haven't seen "clarification" yet on how the IRS plans to handle that kind of situation.