By Elliot Raphaelson
Q: I have a 401(k) account and multiple IRA accounts. Can I take one required minimum distribution (RMD) in 2021 to cover all these accounts?
A: No. You may make one RMD to cover all of your traditional IRA accounts you own. However, you have to make a separate RMD for the 401(k) account.
Q: I received a Recovery Rebate card rather than a check or direct deposit. Is this legitimate? I have not seen any discussion of this in the press.
A: It is legitimate. Here are the procedures for determining if the card is legitimate:
It should arrive in a white envelope bearing the Department of Treasury seal. The card should have a Visa logo on the front and on the back the name Metabank, the bank that issued the card. You can activate your Economic Impact Payment card, set your four-digit PIN and check your balance by calling 1-800-240-8100. Then make sure to sign the back of your card and keep it in a safe place.
Q: My wife received a payment for life insurance proceeds. She and her brother were beneficiaries of a life insurance policy. They received different amounts. My wife received Form 1099-INT indicating that part of her proceeds represented interest that is considered taxable income to report on her 2020 tax return. How can we determine whether this amount is correct, and whether some should not have to be reported on her brother’s tax return?
A: Your wife should contact the insurance company to verify whether the amount recorded on Form 1099-INT is correct for interest received. The insurance company should have the records to indicate what portion of her insurance payment was interest.
Q: I was divorced for many years after my previous marriage of 15 years. I remarried after I turned 60. I currently receive spousal benefits based on my current husband’s work record – 50% of his Social Security benefit. The man I have been divorced from recently died. I understand that he waited until age 70 to file for his Social Security benefit. He remarried and his second wife is still living. I have never applied for a benefit based on his work record. I understand that I may be entitled to a survivor benefit based on his work record. How can I find out if that is true?
A: It is possible that you are entitled to a survivor benefit based on your ex-husband’s work record. You have to contact the Social Security Administration and provide information about your previous marriage, including your ex husband’s Social Security number, the record of his death and proof that you were married for more than 10 years. You also have to provide proof that you remarried after age 60. SSA should then be able to indicate whether you are entitled to a survivor benefit. You are entitled to whichever is more: the survivor benefit or the spousal benefit based on your current marriage. You are not entitled to both.
Q: I took a RMD in 2020 and rolled the proceeds over after regulations were passed stipulating that no RMDs were required in 2020. I understand that I will receive notification of the rollover in May. Is that correct?
A: You will receive Form 1099-R indicating a record of your distribution. In May, you should receive a record of your rollover from your custodian on form 5498. You do not need to submit Form 5498 when you file your tax return for 2020.
Elliot Raphaelson welcomes questions and comments at firstname.lastname@example.org.