Tax Due on IRA RMD

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nickfrank
Posts: 26
Joined: Tue Feb 23, 2010 1:39 pm

Tax Due on IRA RMD

Post by nickfrank »

I'll try my question again since responses did not answer my question I am clear about age requirement for RMD and the use of the life expectancy table. I will be 70 April 2011. I need to know how I determine 12/31/10 balance since it is a mixture of tax deferred and tax paid IRA assets. The tax paid amount has been stipulated on form 8606.

Thanks again,

Nick
earlyout
Posts: 1430
Joined: Tue Feb 20, 2007 5:24 pm

Post by earlyout »

Your RMD for 2011 will be based on the 12/31/10 balance and this is simply the total value of all of your traditional IRA accounts on that date. You will have to wait until the end of the month to know the exact number. The end of the year value includes deductible and non-deductible contributions and any increase of the value of the contributions. The ratio of deductible/non-deductible contributions is used in calculating the taxes that are due on the RMD .

EO
Last edited by earlyout on Fri Dec 03, 2010 12:45 pm, edited 1 time in total.
kaneohe
Posts: 6687
Joined: Mon Sep 22, 2008 12:38 pm

Post by kaneohe »

The total of all your TIRAs.....regardless of whether deductible/non-deductible..........determines RMD. Taxation, which depends on whether deductible/non-deductible, is determined by pt I form 8606.

as EO mentioned , RMD DISTRIBUTION for a particular yr is determined by
previous yr ENDING BALANCE. If it depended on same yr ending balance, you would not know that on a timely basis to take RMD before yr end.
pshonore
Posts: 6871
Joined: Sun Jun 28, 2009 2:21 pm

Post by pshonore »

Since you're turning 70 1/2 in October 2011, you have until April 1, 2012 to take your first RMD if that is adventageous to you. Note if you do that, you will have to take 2 RMDs in 2012 (one for the 2011 RMD which you delayed, and the regular 2012 RMD.)

From the IRS website:
An account owner must take the first RMD for the year in which he or she turns 70 ½. However, the first RMD payment can be delayed until April 1st of the year following the year in which he or she turns 70 ½. For all subsequent years, including the year in which the first RMD was paid by April 1st, the account owner must take the RMD by December 31st of the year.
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