Delaying first Required Minimum Distribution could lead to a surge in tax burden
- 1The IRS allows delaying the first Required Minimum Distribution (RMD) until April 1 of the year following age 73 or 75.
- 2If savers miss the December 31 annual RMD deadline, they must pay a 25% penalty for failing to meet the RMD on time.
- 3Delaying the first withdrawal results in two RMDs being performed in the same year, which could increase the tax bill.
So what's the key point?
There is a rule that requires taking out retirement funds at a certain age, and this can be delayed once. However, because two withdrawals must be made in the same year, it could result in higher taxes.
Source The Motley Fool +1 · View original ↗
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