A few days ago, the IRS reminded all taxpayers who turned 70.5 years of age during 2017 must start receiving required minimum distributions (RMDs) from IRAs and workplace retirement plans by April 1st – and we want to make sure you are aware, too.
So if you did acquire the age of 70.5 in 2017 and have an IRA or workplace retirement plan, or know someone who did, here are some more details of what you need to do.
Which retirement plans does this deadline apply to?
This April 1st deadline applies to all retirement plans sponsored by employers, such as profit-sharing plans, 401(k) plans, 403(b) plans, and 457 (b) plans. This RMD deadline also applies to most IRA plans, such as traditional, SEP, SARSEPs, and SIMPLE IRAs. It is good to note, though, that this deadline does not apply to ROTH IRAs.
Does this deadline occur every April?
The deadline only applies the required distribution for the first year. After that, including the year where you were paid your first RMD by April 1st, the RMD must be made by December 31st. So let’s say you did turn 70.5 years old in 2017. If you receive your first RMD for 2017 on April 1st, you must still receive the second RMD by December 31st of this year.
How do I figure out my RMD?
If you reached the age of 70.5 in 2017, you can figure out your first year RMD using the life expectancy as of your birthday in 2017 and your account balance of December 31st, 2016. You can use Table III (Uniform Lifetime) to figure our your RMD. This can be found in the appendices of Publication 590-B. Any questions about this? The Golden Girls are here to help – just ask us.
Does everyone fall under the April 1st deadline?
It applies to MOST people who have a traditional IRA or participate in workplace retirement plans. However, some people with workplace plans can wait longer to get the RMD. If you are an employee who is still working and your plan allows it, you can wait until April 1st of the year after you retire to start receiving these distributions.
If you have any other questions not covered here, please reach out to us.
