.

SmartMoney Blogs

The Tax Blog
The latest news, insights and tips about taxes

That Other April Deadline

Tick tock. There’s a deadline creeping up on some of you. And it’s not April 18. If you turned 70½ in 2010 you have until April 1, 2011 to take your first required minimum distributions (RMDs) from all tax-deferred accounts such as individual retirement accounts (excluding Roths) and 401(k)s.

The IRS requires you to take a minimum amount of money from your tax-deferred retirement accounts each year beginning the calendar year after you turn 70½. Typically, you need to do this before December 31. However, you get a three-month extension into the following year for your first distribution. Be aware that if you waited until April to take that first withdrawal, you must take two in a single calendar year. That could end up boosting you into a higher tax bracket.

If you don’t take your distribution on time, you’ll likely get hit with a penalty of up to 50% of the amount not taken.

Figuring out the amount of your first and future RMDs isn’t complicated. Take the year-end balance on your account and divide by a so-called life-expectancy factor, which you’ll find on the Uniform Lifetime Table provided by the IRS. (The IRS provides two different tables depending on your marital status, the age of your spouse and the beneficiary of your account.) “Once people get into a rhythm, things tend to go more smoothly,” says Stuart Ritter, a vice president and certified financial planner at T. Rowe Price.

If you have multiple IRAs, you have the option to calculate the RMD for each account and make an aggregate withdrawal from one. This isn’t the case for 401(k) plans, which require owners to withdraw (at least) that calculated amount from each account owned.

If you’re approaching 70½, it’s a good idea to get in touch with your financial-services firm to map out your distributions. The IRS does require firms to send statements regarding RMDs to clients by January 31st of the year they turn 70½ (as long as that firm holds the client’s IRA as of December 31st of the prior year and an RMD is required). Some financial services firms send their own reminders to clients approaching the RMD deadline.

If you’re already taking distributions, say every month, that add up to at least the minimum amount, you don’t have to make an additional withdrawal. And you can always take out more than the RMD calculation: “‘M’ stands for minimum,” says Ritter.

Readers, did your financial-services firm do a thorough job of coaching you or your family member’s approach to 70½?

Comments

We welcome thoughtful comments from readers. Please comply with our guidelines. Our blogs do not require the use of your real name.

Comments (5 of 42)

View all Comments »
    • This is having a bit far more subjective, however I a lot like the Zune Market. The interface is colourful, contains further more aptitude, and some cool capabilities together with ‘Mixview’ that permit oneself suddenly see equivalent albums, audio, or other users identical toward what you might be listening in the direction of. Clicking on a single of these will middle on that merchandise, and one more fastened of “neighbors” will occur into viewpoint, letting on your own in direction of navigate more than exploring through comparable artists, songs, or users. Talking of people, the Zune “Social” is much too very good exciting, allowing yourself come across other individuals with shared choices and turning into pals with them. Your self then can pay attention in direction of a playlist produced dependent upon an amalgamation of what all your close friends are listening in direction of, which is furthermore thrilling. People nervous with privacy will be relieved toward comprehend by yourself can stay away from the community versus viewing your personal listening practices if you consequently just take.

      http://www.healthandfitnessinformation.org

    • This is starting to be a bit far more subjective, still I considerably favor the Zune Current market. The interface is colourful, consists of even further aptitude, and some neat attributes together with ‘Mixview’ that let yourself instantly see very similar albums, new music, or other users similar in direction of what you happen to be listening toward. Clicking on a person of those people will heart upon that solution, and one more mounted of “neighbors” will occur into belief, enabling by yourself in direction of navigate in close proximity to investigating through very similar artists, new music, or consumers. Chatting of users, the Zune “Social” is too Terrific entertaining, allowing for your self obtain many others with shared tastes and getting close friends with them. You then can listen in the direction of a playlist generated based mostly on an amalgamation of what all your pals are listening toward, which is moreover enjoyable. All those nervous with privateness will be relieved to notice by yourself can stay away from the community in opposition to watching your person listening practices if by yourself thus make your mind up.

      http://www.gamestips.org

    • This is taking a little bit added subjective, still I a great deal want the Zune Market. The interface is colorful, consists of further more aptitude, and some great features which includes ‘Mixview’ that permit oneself abruptly perspective identical albums, tunes, or other customers identical in the direction of what you are listening towards. Clicking on 1 of those will centre on that solution, and yet another preset of “neighbors” will occur into watch, allowing by yourself to navigate over researching by way of related artists, new music, or consumers. Talking of people, the Zune “Social” is on top of that great entertaining, enabling yourself find other individuals with shared preferences and turning into close friends with them. Your self then can listen in the direction of a playlist developed based on an amalgamation of what all your buddies are listening in the direction of, which is on top of that interesting. Those fearful with privacy will be relieved in direction of know you can stay away from the community against looking at your person listening routines if your self thus come to a decision.

      http://www.bestescort2016.info

    • The Zune concentrates on becoming a Moveable Media Player. Not a web browser. Not a match machine. Probably in just the upcoming it’s going to do even much better in individuals areas, still for by now it is really a extraordinary route to set up and listen in direction of your songs and films, and is without peer inside of that regard. The iPod’s positive aspects are its web visiting and applications. If those people strong further powerful, potentially it is your easiest alternative.

      http://www.indonesiabusiness.info

    • This is getting to be a bit additional subjective, yet I considerably want the Zune Market. The interface is colourful, contains even more aptitude, and some cool characteristics together with ‘Mixview’ that allow for yourself instantly watch equivalent albums, new music, or other customers related toward what you might be listening toward. Clicking on 1 of those people will center on that products, and yet another preset of “neighbors” will appear into belief, permitting your self in direction of navigate near investigating as a result of identical artists, songs, or people. Speaking of consumers, the Zune “Social” is also best enjoyment, permitting yourself locate other folks with shared preferences and getting to be mates with them. Yourself then can listen towards a playlist crafted based mostly on an amalgamation of what all your mates are listening to, which is additionally thrilling. Individuals anxious with privateness will be relieved in the direction of realize by yourself can keep away from the community versus seeing your person listening routines if oneself consequently come to a decision.

      http://www.businessservicesonline.net

About The Tax Blog

  • The Tax Blog brings together a team of award-winning tax journalists from the Dow Jones network and around the web to examine the tax issues, changes and legislation that affect families, investors and small business owners. Our contributors include Tax Report columnist Laura Saunders (WSJ), Tax Guy columnist Bill Bischoff and senior reporter Jilian Mincer (SmartMoney.com), retirement-focused reporter Anne Tergesen (WSJ), wealth management writer Arden Dale (Dow Jones Newswires), TaxWatch columnist Eva Rosenberg and personal finance reporter Andrea Coombes (MarketWatch), and reporter Alyssa Abkowitz (SmartMoney). They’ll provide the latest news and insight, mine the tax code for tips and loopholes, and answer your questions about tricky tax situations. Contact the The Tax Blog with ideas, suggestions or tax questions at thetaxblog@dowjones.com.

.