Richard A. Lindsey, CPA

Lindsey & Waldo, LLC – Certified Public Accountants

  • Aug 21

    Q) My granddaughter, Cindy, lived with me for three months of the year and with friends for the other nine months. However, Cindy had no income last year and I provided more than half of her support. Can I claim Cindy as my dependent?

    A) Yes. Although Cindy does not meet the definition of a “qualifying child” because she didn’t live with you for more than one-half of the year, she does qualify as your dependent under the definition of a “qualifying relative” since she didn’t earn more than the exemption amount for last year ($3,950 in 2014) and you provided more than one-half of her support. A qualifying relative does not have to live in the same household.

    Do you have a question for the Taxpert that you’d like to see answered in a future Taxing Times? Or perhaps just an issue you’d like the Taxpert to address? Send the Taxpert a note to Taxing Times, 1050 Hillcrest Rd., Suite A, Mobile, AL 36695 or an email to taxpert@CPAMobileAL.com.

  • Aug 7

    Taxpayers born before July 1, 1945 must generally receive payments from the individual retirement arrangements (IRAs) and workplace retirement plans by December 31.

    Known as required minimum distributions (RMDs), these payments must normally be received by the end of the year. However, there is a special rule which allows first-year recipients, those who reached 70 ½ during 2015 to wait until April 1, 2016 to receive their first RMD. Meaning, if you were born after June 30, 1944 and before July 1, 1945, you are eligible for this special rule which allows you to defer your first payment.

    Note: If you defer your first payment until 2016, you will still be required to take your 2016 RMD in 2016, so you will receive two payments in one year.

    The required distribution rules apply to traditional IRAs, but not Roth IRAs. They also apply to various workplace retirement plans, including 401(k), 403(b) and 457(b) plans.

    The RMD for 2015 is based on the taxpayer’s life expectancy on December 31, 2015, and their account balance on December 31, 2014.