Solved: Will I owe a penalty since I turned 70 1/2 in February 2017, but did not take my RMD until mid-April 2017? If so, how can I request a waiver due to my mistake?
Sign Up

Why sign in to the Community?

  • Submit a question
  • Check your notifications
or and start working on your taxes
Announcements
TurboTax has you covered during Covid. Get the latest second stimulus info here.
cancel
Showing results for 
Search instead for 
Did you mean: 
New Member

Will I owe a penalty since I turned 70 1/2 in February 2017, but did not take my RMD until mid-April 2017? If so, how can I request a waiver due to my mistake?

I turned 70 at the end of August 2016, so 70 1/2 near end of February 2017.  Is the RMD required by April 1 of 2017, or by end of 2017?  If it is required by April 1, 2017, and I take it now (mid-April), I would want to request a waiver of the penalty caused by my misunderstanding.  If necessary, how would I go about that?

1 Best answer

Accepted Solutions
New Member

Will I owe a penalty since I turned 70 1/2 in February 2017, but did not take my RMD until mid-April 2017? If so, how can I request a waiver due to my mistake?

Your first required minimum distribution must be taken by April 1 of the year following the calendar year in which you reach age 70½.  Since you reached age 70 1/2 in 2017, you have until April 1, 2018 to take the first distribution.  

Keep in mind that if you wait until 2018 to take the first distribution, you'll be required to take a second RMD for 2018, so it may be preferable to take the first RMD in 2017.  The IRS explains:

The first year following the year you reach age 70½ you will generally have two required distribution dates: an April 1 withdrawal (for the year you turn 70½), and an additional withdrawal by December 31 (for the year following the year you turn 70½). To avoid having both of these amounts included in your income for the same year, you can make your first withdrawal by December 31 of the year you turn 70½ instead of waiting until April 1 of the following year.

Example: John reached age 70½ on August 20, 2013. He must receive his 2013 required minimum distribution by April 1, 2014, based on his 2012 year-end balance. John must receive his 2014 required minimum distribution by December 31, 2014, based on his 2013 year-end balance.

View solution in original post

1 Reply
New Member

Will I owe a penalty since I turned 70 1/2 in February 2017, but did not take my RMD until mid-April 2017? If so, how can I request a waiver due to my mistake?

Your first required minimum distribution must be taken by April 1 of the year following the calendar year in which you reach age 70½.  Since you reached age 70 1/2 in 2017, you have until April 1, 2018 to take the first distribution.  

Keep in mind that if you wait until 2018 to take the first distribution, you'll be required to take a second RMD for 2018, so it may be preferable to take the first RMD in 2017.  The IRS explains:

The first year following the year you reach age 70½ you will generally have two required distribution dates: an April 1 withdrawal (for the year you turn 70½), and an additional withdrawal by December 31 (for the year following the year you turn 70½). To avoid having both of these amounts included in your income for the same year, you can make your first withdrawal by December 31 of the year you turn 70½ instead of waiting until April 1 of the following year.

Example: John reached age 70½ on August 20, 2013. He must receive his 2013 required minimum distribution by April 1, 2014, based on his 2012 year-end balance. John must receive his 2014 required minimum distribution by December 31, 2014, based on his 2013 year-end balance.

View solution in original post

Dynamic Ads
v
Privacy Settings