2023 Tax Calendar
VIEWpoint Issue 2 | 2022
Inflation Reduction Act: Highlights of Key Changes for You and Yo...
The Internal Revenue Service (IRS) recently issued a reminder for retirement plan participants and individual retirement account owners indicating that required minimum distributions (RMDs) must be taken by Dec. 31.
RMDs are the minimum amount that retirement plan account holders must withdraw annually starting the year they reach 72 or when they retire (if later than 72). However, if the retirement plan account is an Individual Retirement Arrangement (IRA) or the account holder is a 5% owner of the company sponsoring the plan, RMDs must begin when the account holder turns 72, no matter if they’re still working. RMDs that are withdrawn outside of this timeframe could be subject to penalties.
If an account holder turned 70 ½ in 2019 and did not have an RMD due for 2020, they will need to take one by Dec. 31, 2021. Individuals turning 72 in 2021 with a birthday of July 1, 2019, or later will have their first RMD due by April 1, 2022.
Required distribution rules apply to:
Roth IRA accounts do not require distributions while the account holder is still alive.
IRA trustees or plan administrators must disclose the amount of the RMD to the IRA owner. IRA owners must calculate RMDs for each IRA account they hold, but they may choose to withdraw the total amount from one or more IRA accounts. However, RMDs that must be made from workplace retirement accounts must be taken from each plan. Account holders who do not take an RMD or do not withdraw enough may be penalized with a 50% excise tax on the distribution not taken.
If you need assistance making an RMD before Dec. 31, be sure to contact Doeren Mayhew’s dedicated individual tax advisors today.
This publication is distributed for informational purposes only, with the understanding that Doeren Mayhew is not rendering legal, accounting, or other professional opinions on specific facts for matters, and, accordingly, assumes no liability whatsoever in connection with its use. Should the reader have any questions regarding any of the news articles, it is recommended that a Doeren Mayhew representative be contacted.
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