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FINANCE
RBDS & RMDSRETIREMENT PLAN TAX TIPS:
Uby Michael Wiener, E.A. Table.” A separate table is used if the sole beneficiary is the
nder general tax principles, IRA owners cannot owner’s spouse who is ten or more years younger than the owner. See
keep funds in a Traditional IRA including IRA RMD Worksheet Tables to calculate the RMD during the
SEP and SIMPLE indefinitely. If there are no participant or IRA owner’s life as follows: (1) Joint Life and Last
distributions or if the distributions are not large enough, Survivor Expectancy Table-if your spouse is the sole beneficiary
you may have to pay a 50 percent excise tax on the amount and is more than 10 years younger than you; and (2) Uniform
not distributed as required (excess accumulation) and Lifetime Table –for all other IRA owners calculating their own
report the excise tax by filing Form 5329 Additional withdrawals.
Taxes on Qualified Plans (Including IRAs) and Other Tax-
Lastly, for the year of the account owner’s death, use the
Favored Accounts. If you are the RMD the account owner would have received. For the year
owner of a Traditional IRA, you following the owner’s death, the RMD will depend on the
must generally start receiving identity of the designated beneficiary. Beneficiaries of retirement
distributions from your IRA by accounts and IRAs calculate RMDs using the Single Life
April 1 of the year following the Table (Table I, Appendix B, Publication 590-B Distributions
year in which you reach 701/2. from Individual Retirement Arrangements (IRAs). The account
April 1 of the year following balance is divided by this life expectancy to determine the first
the year in which you reached RMD. The life expectancy is reduced by one for each subsequent
age 701/2 is referred to as the year. Spouses who are the sole designated beneficiary can: (1)
required beginning date (RBD). treat an IRA as their own; (2) base RMDs on their own current
age; (3) base RMDs on the decedent’s age at death, reducing the
Your required minimum distribution period by each one year, or (4) withdraw the entire
distribution (RMD) is the account balance by the end of the 5th year following the account
minimum amount you must withdraw from your account owner’s death, if the account owner died before the RMD. If the
each year. You can withdraw more than the minimum account owner died before the RBD, the surviving spouse can
required amount. Your withdrawals will be included in wait until the owner would have turned 701/2 to begin receiving
your taxable income except for any part that was taxed the RMD. See PUB 590-B Chart for RMDs for calculating
before (your basis) or that can be received tax-free (such as required distributions for beneficiaries.
qualified distributions from designated Roth accounts). Note
under a Roth IRA you are not required to take a RMD if If you should have a topic that you would like me to
you are the original owner. However, under a Traditional discuss or if you should have a question, please feel free to
IRA you must start taking RMDs by April 1 following the
year in which you turn 701/2 and by December 31 of later call 239.403.4410 or e-mail me at
years. mike@cctaxandaccounting.com.
Example You reach age 701/2 on August 20, 2015. For
2015, you must receive the RMD from your IRA by April 1, An enrolled agent, licensed by the US Department
2016. You must receive the RMD for 2016 by December 31, of the Treasury to represent taxpayers before the IRS
2016. Note if you do not receive your RMD for 2015 until for audits, collections and appeals. To attain the enrolled
2016, both your 2015 and your 2016 distributions will be agent designation, candidates must demonstrate expertise in
included in income on your 2016 return. taxation, fulfill continuing education credits and adhere to a
The RMD for any year is the account balance as of the
end of the immediately preceding calendar year divided by stringent code of ethics.
the distribution period from the IRS’s “Uniform Lifetime
74 Life in Naples | May • June • July 2016
