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New Member
posted May 31, 2019 6:09:09 PM

I need to take RMD in 2016. I have both deductible and non-dectible IRAs. How do I estimate taxable amount for my RMD?

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Level 15
May 31, 2019 6:09:10 PM

You cannot solely take the after tax distributions from an IRA. It's best explained by example. Let's say you have a $6,000 balance in all your existing traditional IRAs on 12-31-16 and earlier in 2016 you withdrew $4000. The  $10,000, that was in your IRAs, consisted of $3,000 in non-deductible (after tax) contributions, $2000 in  deductible contributions and $5,000 in earnings (interest, dividends & capital gains). Your basis, in all your IRAs, is $3,000. Only 30% of the $4000 withdrawal ($1200) is tax free. TurboTax will divide that $3,000 basis by the $10,000 balance (the $4000 you withdrew plus the $6000 year end balance) to arrive at the 30% tax free ratio.  $2,800 of the withdrawal was taxable. Your revised basis, after that withdrawal, is $1800 (3000-1200).

If less than the entire distribution is taxable, the total distribution will be shown on Form 1040 line 15a (or Form 1040A line 11a) and the taxable portion calculated on Form 8606 will appear on line 15b (or 11b) to be included in your AGI.

2 Replies
Level 15
May 31, 2019 6:09:10 PM

You cannot solely take the after tax distributions from an IRA. It's best explained by example. Let's say you have a $6,000 balance in all your existing traditional IRAs on 12-31-16 and earlier in 2016 you withdrew $4000. The  $10,000, that was in your IRAs, consisted of $3,000 in non-deductible (after tax) contributions, $2000 in  deductible contributions and $5,000 in earnings (interest, dividends & capital gains). Your basis, in all your IRAs, is $3,000. Only 30% of the $4000 withdrawal ($1200) is tax free. TurboTax will divide that $3,000 basis by the $10,000 balance (the $4000 you withdrew plus the $6000 year end balance) to arrive at the 30% tax free ratio.  $2,800 of the withdrawal was taxable. Your revised basis, after that withdrawal, is $1800 (3000-1200).

If less than the entire distribution is taxable, the total distribution will be shown on Form 1040 line 15a (or Form 1040A line 11a) and the taxable portion calculated on Form 8606 will appear on line 15b (or 11b) to be included in your AGI.

Level 15
May 31, 2019 6:09:15 PM

You use the IRA balance on Dec 31, 2015 to calculate it. 

See this IRS FAQ on RMDs….

http://www.irs.gov/Retirement-Plans/Retirement-Plans-FAQs-regarding-Required-Minimum-Distributions 


Here is an IRS worksheet to help you calculate the RMD

http://www.irs.gov/Retirement-Plans/Plan-Participant,-Employee/Required-Minimum-Distribution-Workshe...