This is under IRS Publication 590 or “Rule 590.”
I wrote to our new president about this issue.
Hope he can do something about it because it is a tax on already taxed savings.
A tax on a tax.
The whole idea of an IRA is that both the principal originally deposited, and the resulting profits, were never taxed. That’s why you’re taxed when you take out the money.
More hoops through which to jump just to be “allowed” to keep that which citizens have earned...
Taxes, taxes upon taxes, penalties, penalties with interest, fees, permits, certifications, inspections, the list seems endless. All created “to keep us safe”, LOL.
The election of DJT is the citizenry’s giant middle finger to the Legal Mafia, also known as the Federal Gov’t.
No, it isn’t a tax on already taxed savings. None of the funds in a 401k have been taxed. A 401k is funded by pre-tax income and grows without taxation.
The failure to take a RMD precipitates a penalty. Penalties are not taxes.
The funds withdrawn from the 401k are treated as income and are taxed as such. But, these funds have not been taxed before.
What ain't?
You got paid for doing a job.
The Feds want their share.
Your state wants IT's 'share'.
Your county might want what it is due.
What's left you can spend.
You buy something from some business that has been 'taxed'. (Actually they just get MORE of your money for the feds, the state, and who knows what else.)
The state now might want (MIGHT?? ha ha) MORE of your taxed income so they toss in SALES TAXES.
OK; you now have food in your clutches. You take it home, eat it and darned if you don't have to get rid of the evidence, so you end up paying a SEWER tax!
Determined to lower what gets stolen from you in a myriad of little leaks; you take a road trip to a different state, to study it's tax laws and darned if you ain't taxed (non-representarily) with a Hotel/Motel tax! (Yeah; a modern version of the infamous highwaymen that used to waylay folks on the roads.
Yup; the old adage is true: nothing certain but death and taxes.
Notice taxes is plural?
At least you only have to worry about ONE death!!
Carrier needs your tax on a tax, so does the trillion dollar stimulus and Ivan’s taxpayer money for kids plan. Looks like sprint needs it more than you do also. After all what could be more important than creating or saving jobs, much needed infrastructure and children?