I inherited an IRA from my father this year (not a Roth). I know that typically inheritance is not included in AGI, but does this apply to IRA distributions? I know I have to pay taxes on it but wasn't sure if that means it counts towards my 2021 AGI. We received the 3rd stimulus check and I'm worried if I take a distribution this year, it will put us over the limit and we will have to pay it back -- same with the advance on the child tax credits. We are at about 126k AGI right now.
I would appreciate any help!
thank you!
First you do NOT need to ever pay back ANY of the advance stimulus payments EVER.
Next if you have kids under the age of 18 then the new increased CTC could be affected since there are 2 separate phase out ranges for the 2021 CTC so if your income is too high you will get a reduced CTC.
NOW you have 10 years to deplete the account so you may want to take distributions slower over more tax years. This is where a local tax pro would be handy to advise you of the tax implications and your better choices to implement.
Yes, unless it is a Roth IRA that is not taxable. All taxable income is part of your AGI.
First you do NOT need to ever pay back ANY of the advance stimulus payments EVER.
Next if you have kids under the age of 18 then the new increased CTC could be affected since there are 2 separate phase out ranges for the 2021 CTC so if your income is too high you will get a reduced CTC.
NOW you have 10 years to deplete the account so you may want to take distributions slower over more tax years. This is where a local tax pro would be handy to advise you of the tax implications and your better choices to implement.