RMD

[harley0693]

what is the formula to calculate RMD?

[Anonymous]

Hello Harley 0693,

 Thank you for joining us!

You asked for the formula to calculate your RMD, (Rquired Minimum Distribution).

An  RMD is calculated for each of your IRA or retirement plan accounts by dividing the prior year,  December 31 balance of that IRA or retirement plan account, and then by a life expectancy factor that the IRS publishes in Tables in Publication 590-B, Distributions from Individual Retirement Arrangements (IRAs). 

These mandatory  distributions are required for all retirement plans offered by employers, including profit-sharing, 401(k), 403(b), and 457(b). The same goes for traditional IRAs and IRA-based plans such as SEPs, SARSEPs, and SIMPLE IRAs.

 Nevertheless, Roth IRAs have an exemption from RMD rules while the account owner is still alive. Nevertheless, beneficiaries of Roth 401(k) accounts must follow RMD rules.

Here are links for more information on this topicl from the IRS, includig the Pub mentioned above and the life expectancy table:

• IRS Retirement Plans, IRA's and RMD's
• Pub 590-B 

Please feel free to reach backout with any additional questions or concerns you might have!

Have a great rest of your day!

Terri Lynn, EA

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[xmasbaby0]

You do know that the custodian of the account that handles your retirement account can calculate the RMD for you, right?   In many cases you can simply go on their website to see how much your RMD will need to be.   I, for instance, have funds in Vanguard, and can easily view my retirement account and see how much my next RMD needs to be.

When you take money out of your retirement account, you will receive a 1099R (or import it from the website) and enter the 1099R into your tax return.  The software will ask if the amount was an RMD.

To enter your retirement income, Go to  Federal> Wages and Income>Retirement Plans and Social Security>IRA  401 k) Pension Plan Withdrawals to enter your 1099R.