2023 Taxes Cheat Sheet - Flipbook - Page 13
2018 UPDATED EDITION:
Retirement Taxes Cheat Sheet
Required Minimum Distributions (RMDs)
Increasing Withdrawals Starting at Age 70½
A Required Minimum Distribution (RMD) is a forced withdrawal from a
qualified retirement account that is mandatory during the year your reach age
70½ and all subsequent years until death. These withdrawals apply to
retirement accounts that were taken on a “Pre-Tax” basis, including 401(k) and
IRA accounts. Roth IRA accounts are not subject to Required Minimum
Distributions. The amount of the withdrawal is set by the IRS Uniform Lifetime
Tables, which are included in Publication 590B. These amounts increase each
year and if there is a balance left in the account at death, will be subject to a
different table for beneficiaries. Spouses can inherit IRA accounts and base
future RMD amounts on their age, instead of the age of the deceased spouse,
similar to “Step-up” in basis of other assets that are transferred.
For any amount of RMD that is not withdrawn in the tax year required, a tax
penalty of 50% is applied to the amount not taken. For example, if you are
required to remove $20,000 from your IRA and fail to do so, you will have to
pay a penalty of $10,000 in addition to the ordinary income tax due.
Withdrawal Amounts at Selected Ages
(For Original Owner & Spouse Only)
Age 70 à 3.65% Age 80 à 5.35% Age 90 à 8.77%
Age 75 à 4.37% Age 85 à 6.76% Age 95 à 11.63%
For More Info, Download IRS Publication 590 Here:
www.irs.gov/uac/about-publication-590b
Last Accessed November 1, 2018.
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