They must be calculated separately.Ī husband and wife who each have IRAs and are each subject to RMDs must take those RMDs separately from their own IRAs. IRAs inherited from the same person can be aggregated for calculating RMDs, but RMDs for IRAs inherited from different people cannot be aggregated. You also cannot satisfy an IRA RMD from an inherited IRA. But you cannot satisfy a 403(b) RMD from an IRA and vice versa. 403(b) plans have the same aggregation rule. However, IRAs have a special aggregation rule that allows RMDs from IRAs (including SEP and Simple IRAs) to be taken from any one or combination of those IRAs. For example, you cannot satisfy an IRA RMD from a 401(k), and vice-versa. When a client has multiple IRAs or company plans subject to RMDs, make sure they take their RMDs from the right plan or IRA. If Jim elects to take his first RMD in March 2016, he still must use the DecemIRA balance to calculate his first-year RMD, since that is the year-end balance the year before he turned 701/2. For the first year, the law gives people until April 1 of the next year to take their first RMD.įor example, if Jim turned 701/2 at any time in 2015, his required beginning date is April 1, 2016. 31 balance of the year before the first required distribution year, even if the actual first RMD is not taken in that year. RMDs begin for the year a client reaches age 701/2. A common error is using the wrong balance for the first RMD. The 50% penalty also applies to missed RMDs from inherited IRAs and inherited Roth IRAs.Ģ. There is a 50% penalty for not taking an RMD, although the penalty can be waived for good reason by filing Form 5329 with the IRS and explaining that the client made an honest mistake, was confused or ill, or received incorrect information from the financial institution or adviser. You need to have a complete inventory of accounts subject to RMDs.
In addition, they may have inherited IRAs subject to RMDs. Make sure they have taken all of those balances into account for calculating RMDs. Clients often have several individual retirement accounts or plans.
Not taking into account all retirement accounts subject to RMDs.
0 kommentar(er)
