First RMD withdrawal

[mimosatax2017]

Hi:  

I Turned 72 in Apr 2023 (this year).

1. When is my first RMD to be withdrawn? (IN 2023? before Apr 2024 or before Apr 2025?

There seems to be yet another change for those turning 72 in 2023. 

Thx

Ranga

[Mike9241 · Accepted solution]

On Dec. 29, 2022, President Joe Biden signed the Consolidated Appropriations Act, 2023 (H.R.2617) into law. 

Included in the bill is a retirement package known as the SECURE 2.0 Act of 2022. SECURE 2.0 increased the age at which individuals must begin taking RMDs from their retirement account from 72 to 73, starting on Jan. 1, 2023. 

You must start taking RMDs by April 1 of the year after you turn 73. You will celebrate your 73rd birthday in April 2024. Thus, you must take the first RMD by April 1, 2025 (for 2024). You’ll have to take another RMD (for 2025) by Dec. 31, 2025, and by Dec. 31 each year thereafter. The other option is to take your first RMD in 2024, the year you turn 73 and then by Dec. 31 each year thereafter.

so you have to see which is a better option since doubling up on the RMD in one year can push you into a higher tax bracket. 

[fanfare]

When you turn 73, your first RMD is due by Dec 31, with a grace period up to April 1 of the nex year.

Ir is recommended to take the RMD by Dec 31 otherwise you will have to take two RMDs in the second year.

Contact your custodian early enough for them to handle the paperwork.

@mimosatax2017 

[fanfare]

"I Turned 72 in Apr 2023 (this year)."

Come back again when you are 73 on your birthday

@mimosatax2017 

Or not, since you know what to do.

[mimosatax2017]

Thanks all for a prompt and clear reply!

mimosatax2017

[centerall49]

I turned 73 in May, 2023.  My understanding is that I need to take an RMD for 2023 by April 1 of 2024.  Is that correct?

If my understanding above is correct - I took most of my RMD before 13-31-2024 but  I need to take a little more.  If I take this additional part of my RMD how will the custodian know it should count for 2023 instead of 2024?  The custodian's withdrawal process doesn't ask me to what year the RMD applies.  How do I handle that?

[fanfare]

custodian doesn't need to know. You just take the money out.

You still have to take a 2024 RMD by Dec 31, 2024.

@centerall49 

If you took your first RMD in 2024, nothing goes on your 2023 tax return.

[VolvoGirl]

If you have until April 1, 2024 to take your first RMD then when you enter the 1099R for 2023 you say it was ALL the RMD and you didn't miss any since you have  until 4-1-24.    You meant you took most of the RMD by 12-31-23, right?  Not 2024.  

[centerall49]

Yes, I took about 98% of my RMD before 12-31-2023.  I have already taken a little in 2024 that puts me over the RMD for 2023.

So if I say that the RMD I took was all of the required amount won't the IRS calc that I should have taken more? The withdrawal on the 1099R won't be large enough what they calc that I should take.

[VolvoGirl]

No that will be ok.  And any extra over the 2023 RMD  you take in 2024 will count towards your 2024 RMD.  Don't forget to take the rest before 12/31/24.  

[fanfare]

the recent thinking put forth on this forum is that the IRS doesn't look at your numbers at all.

So Form 5329 is a waste of time.

However, you can't avoid it if the tax software determines it is needed.