When referring to a retirement
account, MRD stands for minimum required distributions, which are mandatory
withdrawals you must take from certain retirement accounts after you reach age
70 1/2. If you have reached this age, and you have one of the following
accounts, you would need to consult with the account provider to ensure, you
are receiving the proper amount to comply.
Basically, MRD requirements
apply to any accounts that you contributed to on a pre-tax basis, or that
contain tax-deferred investment gains. This includes, but is not limited to:
- 401(k)
accounts (except Roth 401(k)s).
- 403(b)
accounts.
- Keogh
accounts.
- Traditional
IRAs.
- SEP-IRA
accounts.
- SIMPLE
IRA accounts.
A
pension is usually a fixed payment over the life of a retiree. It is
the same as, and it satisfies, the "RMD" requirement to
withdraw sufficient amounts each year from retirement accounts.
For
pension distribution, the RMD is satisfied by simply receiving pension
periodically. Under the law it is a required distribution. Indicate that
it is all RMD and his entire RMD with respect to this pension. Therefore, you
may simply select "yes" to the
RMD question (Was this withdrawal RMD and ALL of this was
RMD). You will also be asked if the amount reported is paid
periodically in equal amounts. By selecting "yes" the RMD requirements are met and you may continue with
the tax preparation.
