I have two 403(b) accounts at TIAA. I want to take the aggregated RMD from one of the accounts. TIAA doesn't allow me to do it as a single aggregated RMD. TIAA requires me to take an RMD from one account and then take a cash withdrawal from that account of the amount required to meet the RMD of the other account. I will only receive a 1099-R from the account from which I took the RMD, not from the other account. How to I report to the IRS that I've satisfied the RMD for the second account (with no 1099-R) by making the additional withdrawal from the first account?
And if I get audited by the IRS, what documentation will I need to have to show them that I have satisfied the RMD requirement?
Another thing that annoyed me is that for an RMD, they allow me to opt-out of federal tax withholding, but since their system didn't see the cash withdrawal as the RMD for the second account, it didn't allow me to opt-out of federal tax withholding on the cash withdrawal - even though it was the RMD for the second account.
VolvoGirl gave me a good answer to my question, so I don't need any more help with it. I found some additional information about this issue. It is too late to help me this year. I'm sharing it in case it can help anyone else (either this year or in future years).
If you want to make a withdrawal for an aggregated RMD and opt-out of federal tax withholding, you can't do that through TIAA's online service. The IRS permits opting-out of federal tax withholding on RMDs, but doesn't permit opting-out of federal tax withholding on other withdrawals. TIAA's online service will compute the RMD for the account from which it is being withdrawn and will not permit opting-out of federal tax withholding on more than that amount. An additional withdrawal to cover the RMD for another account is not recognized as an RMD and you can't opt-out of federal tax withholding on the amount of the RMD for another account. However, if you do the RMD withdrawal through paperwork (rather than the online service), you can compute the amount of the RMD yourself and you can make it the aggregated RMD for accounts that the IRS permits you to aggregate. (The IRS permits aggregation of multiple 403(b) accounts.) You can then opt-out of federal tax withholding on the total (aggregated) RMD. So the process is:
- Figure out how much you want to take as an aggregated RMD for accounts which the IRS permits you to aggregate. (The IRS permits aggregation of multiple 403(b) accounts.) The aggregated RMD could cover 403(b) accounts at other custodians.
- Request TIAA to send the forms for an RMD withdrawal. They will fill out a lot of the form for you. I think that includes entering the amount of the (aggregated) RMD that you computed. TIAA could send paper forms through the postal service or, for expediency, TIAA could send the forms electronically for you to print out yourself.
- Complete and sign the form. The form allows you to opt-out of federal tax and state tax withholding. (One of my 403(b) accounts has restrictions requiring a spousal waiver for any withdrawal, even an RMD. The spouse's signature on the spousal waiver has to be notarized. I don't know whether your signature on the withdrawal form has to be notarized.)
- Return the form to TIAA, either by the postal service or electronically.
