If you have a retirement account that has RMD’s, required minimum distributions, you must start paying those the year you turn 70 and a half. If the year you turn 70½ passes without you taking an RMD, no problem: The deadline for the first year's payment is April 1 of the following year. The deadline after the 71st birthday and all following birthdays is Dec. 31 of the year the birthday occurs. In the event the Dec. 31 due date for an RMD passes without the RMD being taken, the next step is filing an IRS 5329 form. You file the tax form with a letter of explanation and take your required minimum distribution when you file your tax form. However, if you fail to pay RMD’s the penalty comes to half the amount not withdrawn that year, plus whatever taxes are due. And every year that goes by without an RMD, it’s another 50 percent of what the distribution should have been for each year.
This can be confusing if you have questions call 320-679-5183.
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