Bumping because I’d like to see the responses too.
You ask a question that could be answered different based on specific facts about your liabilities, assets and other beneficiary of estate.
Have you contacted an enrolled agent? That should be your first step.
you owe Nothing, the exemption is in the Milliions
“Are there short term retirement plans that would allow me excess to my principal without incurring an Early Withdrawal ‘punishment’ fee?”
No punishment for early withdrawal after 59 1/2.
Go talk to someone at the Navy Credit Union
Problem for you is you owe money net to the govt. they always get theirs
Blind Trust.
Anything else is ownership and subject to taxation and confiscation.
Unless the estate is worth more than $10 million, you owe nothing.
Consult a CPA. Some are free, others for a nominal charge.
You have to start taking the Social Security payment at 70.5 years. Don’t go past that. Start taking it. Your 20,000 inheritance should have no tax liability. Please see an accountant.
Just read this a bit more closely - take it out in cash asap after receiving it. But if you really owe the US govt that much money, you may want to face facts. They will withhold SS payments among other things if you don’t stay on schedule/pay up.
I inherited $45,000 from my fathers estate last year and did not have to pay anything to the IRS (Federal Government). Only had to pay 4% tax to the state of Pennsylvania.
Seriously.
No disrespect intended but from the ?’s you ask indicate you can and will be guided in the wrong direction due to a lack of solid unbiased “knowledgeable” info.
This aint the place
You need to spend a few bucks on a CPA schooled in IRA and Retirements.
“Ed Slot” has a web sight that will/may head you in the right direction?
USAA (all us Military types love them) has a financial planning wing of the organization that may guide you for free.
You owed nothing on the inheritance from the sis and will not going forward unless it was in an IRA. If so than you’ll need guidance.
Wait a minute.
You got $20.000 bucks?
Can we be friends and travel together?
As I understand your question, you are concerned that the lender in the case of your outstanding student loan could call the loan. And thereby somehow attach this inheritance. The specific answer to your question is to look at the documents for your loan and determine whether that loan is what is known as callable. I would imagine it is not callable, unless you default, IE stop making payments; in which case the typical action of a lender is to declare the loan in default and to make a claim for the entire unpaid balance in one form or another. So the answer is if you keep making payments, then the inheritance is not vulnerable. There is probably no simple way to Shield that inheritance from the actions of a lender who declares your loan in default. There are ways to do it but they are not especially above-board.
In regards to minimizing the effects of IRS on your inheritance.
Take your distribution check and cash it at the bank it was drawn on or go to one of them check cashing places.
For that amount of money, you should hire a tax specialist. Depending on FR advice would be foolish, even if well-intentioned.
My next stop would be to ask someone at the Navy hospital to refer me to an advisor.
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And by advisor, I’m presuming you mean a tax advisor or accountant. My simple advice; play it straight up with the accountant. Explain your situation fully. Then it is up to them to provide the best legal tax advice.
No funny accounting games, please! We’re not Leftists.
I have been a tax preparer for 8 years and an Enrolled Agent for 4 years. Your full retirement age for Social Security if 66 years and 4 months if you were born in 1956.
Need to know the age of the sibling on the date of death and what type of income was inherited.
If your sibling was under 70.5 and you inherited a traditional IRA, you can take the RMD (Required Minimum Distribution) in a lump sum or over 5 years.
If the sibling was over 70.5 and you inherited a traditional IRA, you can take the RMD either using your sibling’s age or your age.
If the income was stocks, you can use stepped up basis to decrease the gain. Basis is the Fair Market Value (FMV) at date of death but the acquisition date is still the date that your sibling bought the stock. This gives you a lower gain and long term capital gains tax treatment.
If the income was in a ROTH IRA and the account was set up for at least 5 years before the siblings death, the income will not be taxable.
If the income was savings or checking (not in a deferred compensation plan such as a traditional IRA, 401k, 403b, 457, etc), it will not be taxable.