However stout your clients’ tax defenses, there is almost no avoiding the levy against retirement plans for the year they reach 70 1/2, when they must start withdrawing cash from IRAs and 401(k) plans and paying ordinary income tax on it, writes Robert Hershey in the New York Times.

 In addition to a possible increase in ordinary tax rates, the 3.8 percent Medicare payroll tax will start next year to apply to capital gains, dividends and other investment income for joint filers with at least $250,000 in income. Retirement distributions are excluded from the Medicare tax but still must be included in calculations of the $250,000 threshold.

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