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Looming Deadlines and Important End of Year IRA & 401k Information

Video Highlights

[00:45] If you’re over 70 and a half, or if you turn 70, before July 1st this year, you need to take a required minimum distribution (RMD).

[00:52] If this is your first year, you’ll have until April of next year to get your first required minimum distribution

[00:57] If you are already 70 and a half, and you haven’t been taking out required minimum distributions, you are required to take them before December 31st.

[01:50] You have until April 15th, to go to your custodian, and make a contribution to your IRA for the previous year.

[02:15] If you have an Individual 401k, you also have some time the following year, to make previous year’s contributions to your 401k, but you have to have the 401k created, by 12/31.

[02:59] If you’re going to use Sunwest Trust to create your individual 401(k), we require that you get the application to us by December 27th.

[03:57] Form 5498 won’t go out until May, and you don’t need them to file your taxes.

[04:15] I hope you have a great Christmas, and a great New Year. We will see you again next year.

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Important IRA End of the Year Deadlines for Required Minimum Distributions (RMDs), Fair Market Value (FMV) Worksheets, Making Contributions to Existing Retirement Accounts, and Opening New Accounts

We’re coming to the end of another great year for Sunwest Trust. I know it’s a very busy time of year for everyone, but there are some important things that you need to be thinking about in the coming weeks.

As we get closer to the end of the year, we get tons of questions asking when certain forms come out. Here is a quick rundown for all the forms and when we send them out.

Have You Taken Your Required Minimum Distributions

  • If you are over 70 ½ years old, you must take a Required Minimum Distribution (RMD) by the end of December.
  • If you turned 70  after June 30th, beginning July 1st, you must take a distribution from your IRA, to fulfill your RMD requirement, by April of the following year.
  • If you turned 70 before July, you must take your full RMD before December 31st.

Something else of note for first time RMDs: if you are taking your first RMD by April 1st, then you will have to take another RMD by December 31st of the following year. If you fall into this category, then this is the only time you might ever be required to take two RMDs in the same calendar year. The subsequent years, your RMD will have to be received before December 31.

If you have already begun taking RMDs, make sure that you speak with a tax professional and take your appropriate RMD before December 31st.

IRA Fair Market Valuation of Your Assets Are Crucial

In 1987, the IRS published News Release 87-70, which referenced a new reporting requirement initiated by the Tax Reform Act of 1986. This News Release explains the Fair Market Value, which is included on the annual 5498 form.

The Fair Market Value (FMV) of your IRA will be determined by the value of each asset on December 31st. You will, therefore, receive an FMV Worksheet from us in January for the previous year’s valuation, which needs to be filled out and returned to our office, no later than March 31st. It is very important that you provide us with an accurate fair market value of your IRA. The FMV worksheet is what we use to prepare your 5498, which is sent to the IRS on an annual basis in the month of May.

For normal brokerage houses that only deal with stocks, bonds, and mutual funds, this is easy to determine. However, with a self-directed IRA, it is sometimes impossible for the IRA Custodian to determine the value of your investment. It is the responsibility of the account holder to get a third party valuation of their assets and provide that to the IRA Custodian before March 31st of the following year.

In January, you will receive an Asset Valuation Worksheet from Sunwest Trust. We ask that you fill this form out to the best of your knowledge and return it to us along with any accompanying documentation you have. If you would like to get a head start on the form, then you can click the link to download it –second from the bottom on the list of forms.

Again, be advised. Although you will receive the Asset Valuation Worksheet in January from us when determining the Fair Market Value of your account, we require the Fair Market Value of the assets in your account as of December 31st of the previous year.


  • 4th quarter statements and asset valuation worksheets go out in January.
  • IRA Fair Market Valuation is as of December 31st of the previous year.
  • The deadline to return the IRA Fair Market Valuation worksheet is March 31st.
  • Valuations received after the deadline will not be accepted.

IRA Contributions

The good news is that in most cases, the end of the year is not necessarily the deadline for most things in your IRA.

For contributions or setting up a brand new IRA, you have until April 15th to make prior year contributions.

Many clients will have their taxes prepared early in the year so they can determine their contribution limit to ensure certain tax breaks for the year. For instance, a client may have their taxes prepared and then decide it would be advantageous to contribute to their IRA in order to receive certain tax deductions.

Keep in mind that it is beneficial to you to get your taxes prepared early so you can take full advantage of your yearly contributions and get those to your custodian by April 15.

If you plan on setting up a SEP or Simple IRA for this year, you will have until April 15th, then plus extensions to make prior year contributions.


  • IRA opening deadline:  April 15th.
  • The contribution deadline for both the ROTH and IRA for tax purposes is April 15 of the following tax year.

For IRA Holders, Other Key Dates To Remember

  • 1099s go out before January 31st
  • 5498s are not needed to file your income taxes. 5498s will not go out until May.
  • RMD Letters go out in January.

Additional Year-End Thoughts

  • REMEMBER, IRA contributions for next years canNOT be made until January 1. IRA Contributions can NOT be made in advance, regardless of the reason.
  • Employer SEP, SIMPLE and 401k contributions can be made until the due date of the business tax return plus extensions. However, Elective Deferrals must be taken from payroll by December 31 and deposited timely.
  • IRA Distributions must be dated and postmarked by December 31, to be correctly reported on the IRS Form 1099-R.
  • Qualified Charitable Distributions from IRAs to qualified charities must be completed by December 31.

Interested in Opening an Individual 401(k), Then Act Now Before The End of The Year!

However, a few things must be done before the end of the year.

If you plan to open an Individual 401(k) for this calendar year, then this must be done before December 31st. Unlike an IRA, an Individual 401(k) must be completed before the end of the calendar year. It must be opened by December 31st, but you will have until April 15th, plus extensions to make contributions.

Now, keep in mind that every establishment’s holiday schedule is slightly different. At Sunwest Trust, we are requiring that all i401k applications be received by December 27th to have the application completed and returned to you to sign by year end.


  • Opening an Individual 401(k) for this calendar year must be done by December 31st.
  • Contributions can be made towards the Individual 401(k) until April 15, and possible extension periods
  • Sunwest Trust requires i401(k) applications be received by December 27

THREE quick reminders that we’ve recently covered:

  • FMV or fair market valuation is due early next year and are reported as of December 31st.
  • 1099s will be sent by Sunwest Trust by January 31st next year if you took a distribution from your IRA.
  • 5498s will not be sent out until May because you can still contribute to your IRA until April.

Thanks and Happy Holidays!

Video Transcript

Hi. My name’s Terry White, CEO of Sunwest Trust, and we’re getting very close to Christmas and to the end of 2014. This video is going to be kind of a catchall of things you need to think about as we approach the end of the year. Then, we won’t have videos now until January 6th. We’re going to kind of take a little holiday from Tuesday at 2:00 for a few weeks, and then we’ll be back on January 6th. Watch your emails, if you subscribe, and we’ll be back providing you with exciting, pertinent IRA information starting in January.

First of all, I want to remind you, if you’re over 70 ½ — if you turned 70 before July 1st this year, you’ve got to take an RMD. You’ll have until April to get that done if this is your first year if this is the year you turned 70 ½. If you are already 70 ½ and have been taking RMDs, you have to take that before December 31st. Keep that in mind and get your paperwork into your custodian, whether it’s here at Sunwest or somewhere else because it takes a little bit of time to get that done. Be sure to get that paperwork in as soon as you can.

Now, as far as contributions are concerned to your IRA, to your traditional or Roth IRA — I don’t know. I’m trying to think. Roth, it really wouldn’t matter that much. But, you’re traditional, you have until April 15th of next year to make a contribution for 2014. What most people do is they end up doing their taxes early in 2015 and they decide it would really be advantageous for them to make a contribution to their traditional IRA in order to get that deduction. You have until April 15th to go to your custodian and make a contribution for 2014. You’ve got a little time there. Just keep that in mind so that you don’t overrun that, and then put yourself in a position where you’re unable to make a contribution for 2014, and realize that tax savings if you’re making a deductible contribution to a traditional IRA.

The other thing I want to mention is, if you have an individual 401(k), you also have some time next year to make 2014 contributions to your 401(k). You have to have the 401(k) created by 12/31. If you get the 401(k) document done by 12/31, then you have a 401(k) for the year of 2014. You have until April 15, plus extensions, which I think puts you until September or October, to make the contribution for 2014. You’ve got a lot of time there. The key is to get the document created by 12/31 of this year.

Now, if you’re going to use Sunwest Trust to create your individual 401(k), we are requiring that you get the application to us by December 27th. If you get it to us by December 27th, we will get the documents to you that you need to sign in order to have the 401(k) in effect. We’ll get those to you by December 31st so that you’ll qualify for this year’s filing.

Those are a couple other things you have to keep in mind. Again, we’re going to need the market value reports from you early next year, as of 12/31 this year. We’ll be sending out 1099s in January if you took distributions. We won’t be sending the 5498s out until next May. We always get calls between January and April 15th saying, “Hey, I didn’t get my 5498. I need that to file my taxes.” But, those won’t go out until May, and you don’t have to have those to file your taxes.

Those are the few things you need to keep in mind for the end of this year. I hope that you have had a great year as we have. I look forward to the next couple of weeks. I hope that you have a great Christmas, and a great New Year’s, and we will see you again next year.


Terry White

About Terry White

I started my business career after getting my degree in Accounting from the University of New Mexico in 1983. My first job was as a controller for a local title company, and in 1987 I started First Financial Escrow, Inc. Over the years I played a part in several startup companies including First Financial Equities, Inc., First Financial Trust, Inc., First Financial Marketing, Inc. and Asset Ventures, Inc. In 1997 First Financial Escrow, Inc. was able to purchase the escrow accounts from Sunwest Bank and changed its name to Sunwest Escrow. As the market changes, Sunwest has grown and changed along with it. Besides my wife, Sheila, we have three boys, two daughters-in-law, one grandson, another grandson on the way and a future daughter-in-law. Sunwest is my passion, and I enjoy coming to work every day to see what will happen next. I enjoy fly fishing, spending time in Colorado, biking and watching my boys play soccer.