Hi,
My husband unexpectedly passed away at age 72 this year and I'm wondering what I should do with his IRAs, both Traditioal and Roth.
As I said in the title,
I am under 59 1/2 years old. (52)
Husband's accounts(both TRA/ROTH) have met over 5 years old.
According to IRS RMD rule last year, he has started RMD last year for tax return 2022 already.
I am a non-citizen resident and may choose to go back to my home country before 59 or after(I don't know yet), therefore I may need to withdraw money from both his and my IRAs ,
I was thinking about cashing out all his IRA money, but then considering the penalty and/or taxes...I am re-considering.
I have explored all over on the internet on this.
1. I was looking at IRS https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-beneficiary#:~:text... website and found this line...
"Death of account holder after 2020" , "after the required RMD beginning date", it says
"Keep as an inherited account"
- Take distributions based on their own life expectancy, or
"Rollover the account into their own IRA"
while other expert pages say, "Roll over in your own name", or "Keep it as an inherited IRA as a beneficiary"+5-year distribution rule(or 10?), or "Cash all out"...
Why the differences?? what iare 5- year/10-year distribution rules...?
2. If I choose to treat his TRA/ROTH as "Inherited IRAs as a beneficiary(not as my own)", I need to distribute certain amount of money according to "my life-expectancy table", and from ROTH as well as TRA accounts, am I correct?
3. What is "earnings"? Is earning the amount that's gained in the IRA accounts over the years with bank interest or through investment , am I correct?
Then , since I am under 59 1/2, when I do RMD gradually from inherited IRAs, will the distributed amount over his base contributed amount be subject to tax if I have distributed all money out of the inherited IRAs within the next couple of years before I reach 59 1/2 ?
4. Am I subject to 10% early withdrawal penalty for being under age 59 1/2?
Next year, I still can file jointly for 2023, but after that, it'll be single filing. I hear single filing is higher in taxable range...but still yet, my household income will drop, which is why I think it's better not to cash out this year (although total amount from his IRAs are not that much...). Am I thinking correct??
I am sooo overwhelmed by so much pressure with all the things I need to take care, so many questions.
Thank you in advance.
