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Old 03-05-2016, 04:13 PM
 
Location: Florida -
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My birthday is in August, which gives me until February following my 70th birthday to withdraw my first RMD ... which, would postpone taxes for the first RMD to the year following my 70th birthday.

My question is: Suppose I take my first RMD in January or February of the year following my 70th Birthday. Are subsequent RMD's then due within the same calendar year ... or within the year of the date I took my first RMD?

In other words, If I take the first RMD in February of the year following my 70th birthday, will I then need to take a second RMD sometime between February and December of the same year?
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Old 03-05-2016, 04:39 PM
 
Location: The South
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From the IRS FAQ

When must I receive my required minimum distribution from my IRA?

You must take your first required minimum distribution for the year in which you turn age 70. However, the first payment can be delayed until April 1 of the year following the year in which you turn 70. For all subsequent years, including the year in which you were paid the first RMD by April 1, you must take the RMD by December 31 of the year.

You need to be careful and not take two distributions the same year.
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Old 03-05-2016, 07:35 PM
 
Location: OH>IL>CO>CT
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RMDs are essentially a calendar year process. You can withdraw the money anytime from Jan to Dec of a given year (say 2016). Then you report it , pay the taxes, on that calendar year's (2016) return.

Also, your IRA or 401K custodian should be (& are required to) to provide you detailed guidance each year. And be careful to have appropriate Federal and/or State Income taxes withheld as part of payment, to avoid any underwithholding penalties. You will be issued a 1099-R.

As said, even though it is allowed, avoid waiting to take the FIRST RMD by the April 1 deadline (say 2017). Otherwise you have 2 RMDs to report on that year's tax (2017)return. :-(

FWIW, my 70th b-day was Aug 2014, and 2015 was my 1st RMD, so BTDT.
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Old 03-05-2016, 08:19 PM
 
Location: Florida -
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Quote:
Originally Posted by reed303 View Post
RMDs are essentially a calendar year process. You can withdraw the money anytime from Jan to Dec of a given year (say 2016). Then you report it , pay the taxes, on that calendar year's (2016) return.

Also, your IRA or 401K custodian should be (& are required to) to provide you detailed guidance each year. And be careful to have appropriate Federal and/or State Income taxes withheld as part of payment, to avoid any underwithholding penalties. You will be issued a 1099-R.

As said, even though it is allowed, avoid waiting to take the FIRST RMD by the April 1 deadline (say 2017). Otherwise you have 2 RMDs to report on that year's tax (2017)return. :-(

FWIW, my 70th b-day was Aug 2014, and 2015 was my 1st RMD, so BTDT.
So your 2nd RMD (and tax year) is in CY 2016? (which, according to Southern Man, 'could' be taken as late as 4/15/2017, except the taxes would still be due as part of 2016 taxes?) - Thanks
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Old 03-06-2016, 06:16 AM
 
Location: Central Massachusetts
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One thing to point out. Your RMD is not a take it all in one day thing either. You can just increase your monthly payments to meet or surpass your RMD's for that year.


One thing I read somewhere yesterday is that there is a movement on the floor of the house to eliminate RMD once you reach $100,000.00. This is in the same bill to have RMD's on Roth's.
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Old 03-06-2016, 06:24 AM
 
Location: NC
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Quote:
Originally Posted by golfingduo View Post
One thing to point out. Your RMD is not a take it all in one day thing either. You can just increase your monthly payments to meet or surpass your RMD's for that year.


One thing I read somewhere yesterday is that there is a movement on the floor of the house to eliminate RMD once you reach $100,000.00. This is in the same bill to have RMD's on Roth's.
Is that $100,000 for a single year? Does that mean you can take out another $100,000 that year tax-free?
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Old 03-06-2016, 08:07 AM
 
Location: The South
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Quote:
Originally Posted by luv4horses View Post
Is that $100,000 for a single year? Does that mean you can take out another $100,000 that year tax-free?
I believe it means when your IRA balance is down to 100k, then no more RMD.
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Old 03-06-2016, 08:43 AM
 
Location: Central Massachusetts
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Quote:
Originally Posted by luv4horses View Post
Is that $100,000 for a single year? Does that mean you can take out another $100,000 that year tax-free?
Quote:
Originally Posted by Southern man View Post
I believe it means when your IRA balance is down to 100k, then no more RMD.


Southern man you are correct. I wish I could remember where I read it. It was one of those hidden BO proposals to change our whole way of life. It was in a pile of stuff that once was proposed then shelved and is making its way back.
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Old 03-06-2016, 11:16 AM
 
Location: OH>IL>CO>CT
5,260 posts, read 8,453,388 times
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Quote:
Originally Posted by reed303 View Post
RMDs are essentially a calendar year process. You can withdraw the money anytime from Jan to Dec of a given year (say 2016). Then you report it , pay the taxes, on that calendar year's (2016) return.

Also, your IRA or 401K custodian should be (& are required to) to provide you detailed guidance each year. And be careful to have appropriate Federal and/or State Income taxes withheld as part of payment, to avoid any underwithholding penalties. You will be issued a 1099-R.

As said, even though it is allowed, avoid waiting to take the FIRST RMD by the April 1 deadline (say 2017). Otherwise you have 2 RMDs to report on that year's tax (2017)return. :-(

FWIW, my 70th b-day was Aug 2014, and 2015 was my 1st RMD, so BTDT.
Quote:
Originally Posted by jghorton View Post
So your 2nd RMD (and tax year) is in CY 2016? (which, according to Southern Man, 'could' be taken as late as 4/15/2017, except the taxes would still be due as part of 2016 taxes?) - Thanks
No, the "take it by April 1" allowance is only good for your very 1st RMD. All later RMDs must be done by Dec 31 of the 2nd and future years. Again, that would result in you having to report the total of 2 RMDs in the same tax year, possibly resulting in a higher tax bracket, etc. (and a bigger % of any SS benefits being taxed.)

Why this is allowed is a mystery to me. It seems to create more issues than it solves. You have a whole year, at least, to figure out when to actually make that 1st RMD withdrawal.
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Old 03-06-2016, 11:41 AM
 
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My husband turns 70 in April which means he turns 70 1/2 in October. Technically I could take his RMD in 2017 before April 1. I will not wait until 2017 to take that first RMD though because if I did, it would be on my 2017 taxes. The 2017 RMD would also be on my 2017 taxes. So I will take his 1st RMD before the end of 2016 to avoid paying taxes on two RMDs in 1 year. Once that first year is over, I just owe the yearly RMD to be withdrawn sometime during the tax year.


This is the way I understand the rules. Anything wrong?
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