Monday, March 28, 2016
Thedeadline applies to owners of traditional (including SEP and SIMPLE) IRAs but not Roth IRAs. Normally, it also applies to participants in various workplace retirement plans, including 401(k), 403(b) and 457(b) plans.
Thedeadline only applies to the required distribution for the first year. For all subsequent years, the RMD must be made by . So, a taxpayer who turned 70½ in 2015 (born after June 30, 1944 and before July 1, 1945) and receives the first required distribution (for 2015) on , for example, must still receive the second RMD by .
Affected taxpayers who turned 70½ during 2015 must figure the RMD for the first year using the life expectancy as of their birthday in 2015 and their account balance on Dec. 31, 2014. The trustee reports the year-end account value to the IRA owner on Form 5498 in Box 5. Worksheets and life expectancy tables for making this computation can be found in the appendices to Publication 590-B.
The penalty for failing to withdraw the minimum required distribution by the required deadline is 50% of the shortfall. Therefore if the required minimum distribution were $20,000 and you failed to meet the deadline you will owe a 50% excise tax for your delay of $10,000. There may be a way to get this waived if you have a reasonable excuse but do not count on that rules since the IRS can be tough.
Though the Tax on Excess Accumulation inPublication 575. Employees of public schools and certain tax-exempt organizations with 403(b) plan accruals before 1987 should check with their employer, plan administrator or provider to see how to treat these accruals.deadline is mandatory for all owners of traditional IRAs and most participants in workplace retirement plans, some people with workplace plans can wait longer to receive their RMD. Usually, employees who are still working can, if their plan allows, wait until of the year after they retire to start receiving these distributions. See
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