IRA Aggregation Rule: When Many IRAs Become One

After working for multiple decades, it's not uncommon for a taxpayer to have multiple traditional IRAs. Perhaps you have rollover IRAs from previous jobs or several IRAs at different financial institutions. But “in the eyes of the IRS you have one IRA, no matter how many IRAs you have,” says David Cherill, a certified public accountant and member of the American Institute of CPAs’ Personal Financial Planning Executive Committee.

That wrinkle, known as the aggregation rule, can create surprises if you don’t understand when it comes into play. Here’s how the rule can affect your tax planning.

Rachel L. Sheedy | Kiplinger

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