RMD

[Claire446]

I just finished up my 2020 tax return on Turbotax.  It was very confusing to me because I didn't know the RMD requirement had been cancelled for the year and it was going to be my first year doing RMD so I really didn't understand the whole thing.  I finally figured out that it didn't matter what I said about what was RMD and what wasn't since the whole thing was cancelled, but now I want to make notes so I'll know what I'm doing next year (2021 tax year) when RMD will be required.

I have a university monthly fixed pension and a TIAACREF fixed lifetime annuity that are both paid monthly.   What I understand is that both of these do qualify as RMD in the whole annual? amount and I'll therefore answer "The entire distribution was an RMD"?

I also have a Fidelity IRA account that tells me what my RMD will be for the year...a certain % of the last year's balance.    So If I withdraw more than the RMD from the Fidelity account next year, I'll say "Only part of this distribution was an RMD"?

Thank you.

[MaryK4]

Your required minimum distribution is the minimum amount you must withdraw from your account each year.  

You cannot keep retirement funds in your account indefinitely. You generally have to start taking withdrawals from your IRA, SIMPLE IRA, SEP IRA, or retirement plan account when you reach age 72 if your 70th birthday is July 1, 2019 or later.

The required minimum distribution for any year is the account balance as of the end of the immediately preceding calendar year divided by a distribution period from the IRS’s “Uniform Lifetime Table.”

Although the RMD applies to all qualified plans, for most pensions and annuities, there is not a set account balance in your name- the distributions come from a larger pool of funds so the RMD is calculated by the Plan Administrator.

See RMD Comparison Chart (IRAs vs. Defined Contribution Plans)

Yes, if you withdraw more than the RMD, you indicate "Only part of this distribution was an RMD".  

[macuser_22]

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@Claire446 wrote:

I just finished up my 2020 tax return on Turbotax.  It was very confusing to me because I didn't know the RMD requirement had been cancelled for the year and it was going to be my first year doing RMD so I really didn't understand the whole thing.  I finally figured out that it didn't matter what I said about what was RMD and what wasn't since the whole thing was cancelled, but now I want to make notes so I'll know what I'm doing next year (2021 tax year) when RMD will be required.

I have a university monthly fixed pension and a TIAACREF fixed lifetime annuity that are both paid monthly.   What I understand is that both of these do qualify as RMD in the whole annual? amount and I'll therefore answer "The entire distribution was an RMD"?

I also have a Fidelity IRA account that tells me what my RMD will be for the year...a certain % of the last year's balance.    So If I withdraw more than the RMD from the Fidelity account next year, I'll say "Only part of this distribution was an RMD"?

Thank you.

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There was NO RMD for a IRA in 2020 so for the IRA distribution answer that none this distribution was a RMD.

[Claire446]

I have no choice in the amount that is withdrawn from my lifetime annuity.  It is the same amount every month until I die.   So I assume I say the whole annual amount of that annuity is RMD.

Same is true for the tiny pension my university gave me.  It's lifetime and it is paid each month, never changes, so I plan on saying the whole annual amount is RMD.

My question is if I have this wrong?   Maybe the answer is that none of the 2 above accounts are RMD (being annuities and pensions)?

[macuser_22]

How you answer the RMD question  is irrelevant if you kept the money and did not roll it back.    The answer to the RMD question  does NOT go on a tax return,  it's only purpose to not allow TurboTax to ask the rollover question  because RMD's are not eligible for rollover.