John B. Barry, CPA, P.A.

Required Minimum Distribution (RMD) – Helping you know the rules.

Required Minimum Distribution (RMD) Overview by John B. Barry, CPA, P.A.

– You cannot keep retirement funds in your account indefinitely. You generally have to start taking withdrawals from your IRA, SIMPLE IRA, SEP IRA, or other retirement plan account when you reach age 70½.

– Your required minimum distribution is the minimum amount you must withdraw from your account each year.

– You can withdraw more than the minimum required amount.

– Your withdrawals will be included in your taxable income except for any part that was taxed before (your basis) or that can be received tax-free (such as qualified distributions from designated Roth accounts).

– Beginning date for your first required minimum distribution:

• IRAs (including SEP and SIMPLE IRAs): April 1 of the year following the calendar year in which you reach age 70½.

• 401(k), profit-sharing, 403(b), or other defined contribution plans: Generally, April 1 following the later of the calendar year in which you: • Reach age 70½ or Retire

– For each subsequent year after your required beginning date, you must withdraw your RMD by December 31.

– The first year following the year you reach age 70½ you will generally have two required distribution dates: an April 1 withdrawal (for the year you turn 70½), and an additional withdrawal by December 31 (for the year following the year you turn 70½). To avoid having both of these amounts included in your income for the same year, you can make your first withdrawal by December 31 of the year you turn 70½ instead of waiting until April 1 of the following year.

– Roth IRAs do not require withdrawals until after the death of the owner.

We are available all year to answer any tax, retirement or other general financial questions you may have.
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John B. Barry, CPA, P.A.