Required minimum distribution (RMDs) were waived for tax year 2020 only, so don’t forget to take your RMD for 2021 by Dec. 31, 2021.
If you turn 70½ after 2019, you must begin taking RMDs from your traditional IRA by April 1 of the year following the year you reach age 72. For example, if you turned 72 in September 2021, you can either take your 2021 RMD in 2021 or you can wait until April 1, 2022. However, you must take your 2022 RMD by Dec. 31, 2022, which means you’ll have two RMDs to report on your 2022 return if you wait.
If you fail to take your RMD, you’re subject to a 50% excise tax on the amount not distributed. Don’t panic though. You can ask the IRS to waive the tax due to reasonable error if you take steps to remedy the shortfall. Contact our office and we’ll explain what needs to be done and prepare the necessary paperwork.
This article carries no official authority, and its contents should not be acted upon without professional advice. For more information about this topic, please contact our office.