Readers’ Questions

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Readers questions


I forgot to take my required IRA distributions for 2012.

Is it too late?


late than never.  The excise tax penalty
for not taking a required minimum distribution (RMD) is 50 percent of the
amount due.  You can pay the tax penalty
by attaching Form 5329 to your tax return, or by filing it separately.

Tip:  If you missed the deadline and have a
reasonable excuse, make the withdrawal as soon as you realize you missed it and
ask the IRS to waive the penalty due. 
Include an explanation with Form 5329, but don’t pay the tax.  My experience is that the IRS very often
forgives the penalty.  Just don’t forget


Can I claim the child care credit if the
caregiver is a relative

who lives in our home?


It depends. 
Generally, you can claim a dependent care credit (commonly called the
child care credit) for qualified expenses paid to a relative.  But you cannot if it’s to your spouse, a
dependent child under 19, the child’s parent, or a person whom you or your
spouse can claim as a dependent.  It
doesn’t matter whether or not the caregiver lives with you.  The maximum credit is $600 for one child
under 13, $1,200 for two or more children.