turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
Announcements
Close icon
Do you have a TurboTax Online account?

We'll help you get started or pick up where you left off.

Taxation on RMDs

I know RMDs are taxed as ordinary income.  But are Ordinary Dividends, Qualified Dividends, Capital Gain Distributions and Interest Income that are generated for the IRA during the year also taxed?  And how are they taxed?  What rate(s)?

x
Do you have an Intuit account?

Do you have an Intuit account?

You'll need to sign in or create an account to connect with an expert.

3 Replies
MinhT1
Employee Tax Expert

Taxation on RMDs

All earnings (dividends, capital gains, interest...) made within the IRA are tax-deferred and are not reported to the IRS.

 

Only distributions (including RMDs) are taxed at the ordinary income rates.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
robtm
Level 10

Taxation on RMDs

Any Income earned within an IRA, no matter from which soure, is not taxed until it is withdrawn either as an RMD or as a distribution at which time it is taxed as ordinary income. 

Taxation on RMDs

That is one of the advantages and disadvantages of a IRA.   It grows tax deferred so you don’t pay any taxes on the dividends and interest etc.  while it’s in the IRA account.  You only pay the tax when you take it out.  But then it all comes out as ordinary income, not as qualified dividends etc.  and taxed at your regular tax rate.  

message box icon

Get more help

Ask questions and learn more about your taxes and finances.

Post your Question