Reply
Highlighted
Trusted Social Butterfly
0
Kudos
202
Views

Re: The SECURE act and how it affects RMDs from IRAs

202 Views
Message 1 of 4

"....If you turn 70.5 in one year and then wait until the following year (before April 1) before you take your 1st RMD, which is ok with the IRS - what happens is that you will get a double whammy on your taxes for that year because your 2nd RMD will also be due before the end of that same year (12/31).....".

 

Oh duh!  Thank you.


"...Why is everyone a victim? Take personal responsibility for your life..."
Report Inappropriate Content
0
Kudos
202
Views
Highlighted
Valued Social Butterfly
1
Kudos
215
Views

Re: The SECURE act and how it affects RMDs from IRAs

215 Views
Message 2 of 4

@retiredtraveler wrote:

".....Now for personal advice:

The first year that you take an RMD, the IRA rules will let you wait until April of the following year to take your distribution for the year. Don't do it!.....".

 

Why not? I want to delay as long as possible.


Of course, you do but don't get caught in the IRS web of foolery!

 

If you turn 70.5 in one year and then wait until the following year (before April 1) before you take your 1st RMD, which is ok with the IRS - what happens is that you will get a double whammy on your taxes for that year because your 2nd RMD will also be due before the end of that same year (12/31).

 

Just because the Secure Act changed the beginning RMD age to 72 (beginning in 2020) from the previous 70.5, you still have to watch out for this double whammy or pay taxes on (2) RMDs in the same year.

 

From the IRS

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 72 (70 ½ if you reach 70 ½ before January 1, 2020). However, the first payment can be delayed until April 1 of 2020 if you turn 70½ in 2019  If you reach 70½ in 2020, you have to take your first RMD by April 1 of the year after you reach the age of 72. 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.

.

 

 

 


* * * * It's Always Something . . . Roseanne Roseannadanna
Report Inappropriate Content
1
Kudos
215
Views
Highlighted
Trusted Social Butterfly
0
Kudos
228
Views

Re: The SECURE act and how it affects RMDs from IRAs

228 Views
Message 3 of 4

".....Now for personal advice:

The first year that you take an RMD, the IRA rules will let you wait until April of the following year to take your distribution for the year. Don't do it!.....".

 

Why not? I want to delay as long as possible.


"...Why is everyone a victim? Take personal responsibility for your life..."
Report Inappropriate Content
0
Kudos
228
Views
Highlighted
Frequent Social Butterfly
1
Kudos
287
Views
3
Replies

The SECURE act and how it affects RMDs from IRAs

287 Views
Message 4 of 4

I want to address one change in the new SECURE act and how it affects some of us, individually.

 

The new rule for Required Minimum Distributions from a traditional IRA is that one must take distributions starting the year he or she turns 72. Going from a split year to a full year is confusing. Gotta love the way our hired employees can't stand to make anything simple.

 

For those who were looking at having to take out money from an IRA under the old rule of 70½ but get to postpone the withdrawals under the new rules, be aware that some of us will get a 1-year change, while others will get a 2-year change to the effects on our overall income and taxes.

 

If you were born between January 1 and June 30, 1950, you will now have to take your first RMD in 2022 instead of this year. This gives you a delay of 2 years where your IRA and your taxes are concerned.

 

If you were born between July 1 and December 31, 1950, you will also take your first RMD in 2022, but under the old rule of 70½, you would have had to start in 2021, so that only gives you a delay of 1 year where your IRA and taxes are concerned.

 

Now for personal advice:

The first year that you take an RMD, the IRA rules will let you wait until April of the following year to take your distribution for the year. Don't do it!

 

Be sure to take at least your entire RMD from your IRA during the calendar year.

 

The one exception might be if your taxes during the first year of having to take your RMD would be astronomical while that next year would be a much lower amount for whatever reason, even with taking two RMDs from your IRA in the same year.

 

Going forward through subsequent years, you just have to take your RMD before December 31 every year to avoid penalties.

 

Enjoy!

 

Report Inappropriate Content
1
Kudos
287
Views
3
Replies
cancel
Showing results for 
Search instead for 
Did you mean: 
Users
Announcements

AARP Coronavirus Call-in Event

AARP will host a weekly, live Coronavirus Information Tele-Town Hall on Thursdays at 1 pm (ET). Learn more on AARP's Coronavirus Tele-Town Hall page and join us each week for the latest information.

Calling is toll-free. During the 90-minute live event, government experts will answer your questions and address health concerns related to COVID-19.

Top Authors