Once age 70 \u00bd is reached, you need to take your first required minimum distribution (RMD) from your IRA accounts. You turned 70 \u00bd in 2017 if you were born between July 1, 1946 and June 30, 1947. You always use the age you are on the last day of the year.<\/p>\n
Generally, you need to take your RMDs by December 31st<\/sup>\u00a0of the year for which it is due. But for your first RMD, you can defer the distribution to April 1st<\/sup>\u00a0of the following year. Isn\u2019t it always best to defer income if you can? If you decide to defer that first RMD from 2017 to 2018, you need to realize that you will end up with two RMDs in 2018 (the 2017 & 2018 RMDs). Generally for many taxpayers, the bunching of income is not a good thing.<\/p>\n Who is responsible for computing and remitting the RMD? Many taxpayers mistakenly think their stock broker or some other fiduciary is responsible for computing the correct RMD. While they may compute the RMD, read the fine print. There is only one person responsible for computing the correct RMD \u2013 and that person is the taxpayer.<\/p>\n How is the amount of the RMD computed? You need two pieces of information. First, one looks up his\/her age on the Uniform Lifetime Table to find the applicable life expectancy factor. Life expectancy tables can be found in IRS Publication 590-B. The second item needed is your prior year-end IRA account balance. If you have more than one IRA, you will need to compute the total value as of December 31 of the prior year for all of your accounts. You will divide the factor from the life expectancy table into the total account balance to determine your 2017 RMD. This same process is repeated each year going forward. In other words, the RMD will change each year due to the value of your IRA accounts and your life expectancy. The IRS does not care which IRA accounts are used to make the RMDs, as long as the RMD is made from at least one of the IRA accounts.<\/p>\n Keep in mind that RMDs are taxed in the year they are withdrawn. If you miss the December 31st<\/sup>\u00a0deadline and take your RMD in 2018, it will be taxable for 2018. But, since this is your first RMD and the deadline is not until April1, 2018, there will be no penalty. However, if you fail to take subsequent years\u2019 RMDs by December 31, there is a penalty. And, it is a very significant penalty equal to 50% of the amount not taken. Should you fail to take the RMD by the deadline, consult with your tax advisor as to how to request relief.<\/p>\n If you would like to discuss your business or personal tax planning<\/a>, tax preparation<\/a> and other financial concerns with an experienced tax professional, we invite you to call 610-594-2601<\/a> today to make an appointment at our Exton PA CPA office<\/a> to discuss your situation. You can also schedule a consultation at Click Here<\/a>.<\/p>\n Once age 70 \u00bd is reached, you need to take your first required minimum distribution (RMD) from your IRA accounts. You turned 70 \u00bd in 2017 if you were born between July 1, 1946 and June 30, 1947. You always use the age you are on the last day of the year. Generally, you need […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[3],"tags":[],"class_list":{"0":"post-2417","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-irs-tax-planning-ideas-tips-news","7":"entry"},"aioseo_notices":[],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9W9tf-CZ","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/keysolutions.us\/blog\/wp-json\/wp\/v2\/posts\/2417","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/keysolutions.us\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/keysolutions.us\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/keysolutions.us\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/keysolutions.us\/blog\/wp-json\/wp\/v2\/comments?post=2417"}],"version-history":[{"count":3,"href":"https:\/\/keysolutions.us\/blog\/wp-json\/wp\/v2\/posts\/2417\/revisions"}],"predecessor-version":[{"id":2420,"href":"https:\/\/keysolutions.us\/blog\/wp-json\/wp\/v2\/posts\/2417\/revisions\/2420"}],"wp:attachment":[{"href":"https:\/\/keysolutions.us\/blog\/wp-json\/wp\/v2\/media?parent=2417"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/keysolutions.us\/blog\/wp-json\/wp\/v2\/categories?post=2417"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/keysolutions.us\/blog\/wp-json\/wp\/v2\/tags?post=2417"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Copyright \u00a9 2017 Keystone Financial Solutions, P.C.\u00a0 All rights reserved.\u00a0 BE SURE TO READ THE DISCLAIMER PAGE: Content in this blog is for educational purposes only and should not be considered as the rendering of tax, legal or investment advice. The publisher of this blog makes no representations as to the accuracy or completeness of any information herein, will not be liable for any errors or omissions, and shall not assume liability for any losses, injuries, or damages from the display or use of this information.<\/strong><\/h5>\n","protected":false},"excerpt":{"rendered":"