Your Gross Distribution CAN be zero taxable IF the distribution is from funds that were already taxed. For instance, your employer deducted taxes from your wages for the entire time you were employed. When you first retire, the money you receive as a Gross Distribution has already been taxed. You will not owe any taxes until all of that money has been distributed. Let's say your employer withheld $50,000 while you were working, and you receive $11,00 each year when you retire. The first 4 years you are retired, your Gross Distribution will be zero taxable. The 5th year, $6,000 of the Gross Distribution will NOT be taxable (4 x $11,000 = $44,000 + $6,000 = $50,000--the amount that was already taxed); BUT $5,000 WILL be taxable. And from then on, everything will be taxable. The main thing is you will not be taxed twice on the same money.
4
45
4
Yes
No
