5 retirement account tax traps to avoid

Description

Abstract: For many taxpayers, a large portion of their wealth is set aside in individual retirement accounts (IRAs) or qualified retirement plans, such as 401(k) or profit-sharing plans. These accounts can provide substantial tax advantages, but they can also become traps for the unwary. This article offers five common mistakes to avoid, such as missing required minimum distributions (RMDs) and failing to take them from an inherited IRA or qualified plan. A sidebar discusses when and how much to take in RMDs.