{"id":408,"date":"2019-03-05T22:42:33","date_gmt":"2019-03-05T22:42:33","guid":{"rendered":"https:\/\/ayoub-associates.com\/blog\/?p=408"},"modified":"2019-03-05T22:42:49","modified_gmt":"2019-03-05T22:42:49","slug":"tax-time-guide-seniors-turned-70%c2%bd-last-year-must-start-receiving-retirement-plan-payments-april-1","status":"publish","type":"post","link":"https:\/\/ayoub-associates.com\/blog\/tax-time-guide-seniors-turned-70%c2%bd-last-year-must-start-receiving-retirement-plan-payments-april-1\/","title":{"rendered":"Tax Time Guide: Seniors who turned 70\u00bd last year must start receiving retirement plan payments by April 1"},"content":{"rendered":"<p>IR-2019-29, March 5, 2019<\/p>\n<p>WASHINGTON \u2014 The Internal Revenue Service today reminded taxpayers that, in most cases, Monday, April 1, 2019, is the date by which persons who turned age 70\u00bd during 2018 must begin receiving payments from Individual Retirement Accounts (IRAs) and workplace retirement plans.<\/p>\n<p>This news release is part of a series called the <a title=\"Tax Time Guide\" href=\"https:\/\/www.irs.gov\/newsroom\/tax-time-guide\" data-entity-substitution=\"canonical\" data-entity-type=\"node\" data-entity-uuid=\"bf8299b8-a4d9-4ec5-b722-eb64ac425aaf\">Tax Time Guide<\/a>, a resource to help taxpayers file an accurate tax return. Additional help is available in <a title=\"2018 Publ 17 (PDF)\" href=\"https:\/\/www.irs.gov\/pub\/irs-pdf\/p17.pdf\" data-entity-substitution=\"pup_linkit_media\" data-entity-type=\"media\" data-entity-uuid=\"61a670b5-1804-4c07-bb0e-5eee4d3770e1\">Publication 17<\/a>, Your Federal Income Tax, and the <a title=\"Tax Reform\" href=\"https:\/\/www.irs.gov\/tax-reform\" data-entity-substitution=\"canonical\" data-entity-type=\"node\" data-entity-uuid=\"e8471673-3c14-4749-a65f-96bb3ea9e361\">tax reform information page<\/a>.<\/p>\n<h2>Two payments in the same year<\/h2>\n<p>The payments, called <a title=\"Retirement Topics Required Minimum Distributions RMDs\" href=\"https:\/\/www.irs.gov\/retirement-plans\/plan-participant-employee\/retirement-topics-required-minimum-distributions-rmds\" data-entity-substitution=\"canonical\" data-entity-type=\"node\" data-entity-uuid=\"1ab1d08c-5cdf-432a-8aaa-6175017cb757\">required minimum distributions<\/a> (RMDs), are normally made by the end of the year. Those persons who reached age 70\u00bd during 2018 are covered by a special rule, however, that allows first-year recipients of these payments to wait until as late as April 1, 2019, to get the first of their RMDs. The April 1 RMD deadline only applies to the required distribution for the first year. For all following years, including the year in which recipients were paid the first RMD by April 1, the RMD must be made by Dec. 31.<\/p>\n<p>A taxpayer who turned 70\u00bd in 2018 (born July 1, 1947, to June 30, 1948) and receives the first required distribution (for 2018) on April 1, 2019, for example, must still receive the second RMD by Dec. 31, 2019.\u00a0 To avoid having both amounts included in their income for the same year, the taxpayer can make their first withdrawal by Dec. 31 of the year they turn 70\u00bd instead of waiting until April 1 of the following year.<\/p>\n<h2>Types of retirement plans requiring RMDs<\/h2>\n<p>The required distribution rules apply to owners of traditional, Simplified Employee Pension (SEP) and Savings Incentive Match Plans for Employees (SIMPLE) IRAs but not Roth IRAs while the original owner is alive. They also apply to participants in various workplace retirement plans, including 401(k), 403(b) and 457(b) plans.<\/p>\n<p>An IRA trustee must either report the amount of the RMD to the IRA owner or offer to calculate it for the owner. Often, the trustee shows the RMD amount on <a title=\"About Form 5498\" href=\"https:\/\/www.irs.gov\/forms-pubs\/about-form-5498\" data-entity-substitution=\"canonical\" data-entity-type=\"node\" data-entity-uuid=\"921c04d4-7a8d-4d0c-93cb-847faa2fbc36\">Form 5498<\/a> in Box 12b. For a 2018 RMD, this amount is on the 2017 Form 5498 normally issued to the owner during January 2018.<\/p>\n<h2>Some can delay RMDs<\/h2>\n<p>Though the April 1 deadline is mandatory for all owners of traditional IRAs and most participants in workplace retirement plans, some people with workplace plans can wait longer to receive their RMD. Employees who are still working usually can, if their plan allows, wait until April 1 of the year after they retire to start receiving these distributions. See Tax on Excess Accumulation in <a title=\"About Publication 575\" href=\"https:\/\/www.irs.gov\/forms-pubs\/about-publication-575\" data-entity-substitution=\"canonical\" data-entity-type=\"node\" data-entity-uuid=\"4dddb486-0225-4801-9953-bd03b83b2388\">Publication 575<\/a>. Employees of public schools and certain tax-exempt organizations with 403(b) plan accruals before 1987 should check with their employer, plan administrator or provider to see how to treat these accruals.<\/p>\n<h2>IRS online tools and publications can help<\/h2>\n<p>Many answers to questions about RMDs can be found in a special <a title=\"Retirement Plans FAQs regarding Required Minimum Distributions\" href=\"https:\/\/www.irs.gov\/retirement-plans\/retirement-plans-faqs-regarding-required-minimum-distributions\" data-entity-substitution=\"canonical\" data-entity-type=\"node\" data-entity-uuid=\"7b013f71-021c-47bc-9187-301e4f5bcaea\">frequently asked questions<\/a> section at IRS.gov. Most taxpayers use Table III (Uniform Lifetime) to figure their RMD. For a taxpayer who reached age 70\u00bd in 2018 and turned 71 before the end of the year, for example, the first required distribution would be based on a distribution period of 26.5 years. A separate table, Table II, applies to a taxpayer married to a spouse who is more than 10 years younger and is the taxpayer\u2019s only beneficiary. Both tables can be found in the appendices to <a title=\"About Publication 590-B\" href=\"https:\/\/www.irs.gov\/forms-pubs\/about-publication-590-b\" data-entity-substitution=\"canonical\" data-entity-type=\"node\" data-entity-uuid=\"e6fd51fc-2e5d-464e-9d21-c46a72891622\">Publication 590-B<\/a>.<\/p>\n<p>Taxpayers can find answers to questions, forms and instructions and easy-to-use tools online at <a title=\"Internal Revenue Service | An official website of the United States governmen\" href=\"https:\/\/www.irs.gov\/node\/58476\" data-entity-substitution=\"canonical\" data-entity-type=\"node\" data-entity-uuid=\"d1f9ab87-c91e-442b-8013-c2de4e164243\">IRS.gov<\/a>. They can use these resources to get help when it\u2019s needed, at home, at work or on the go.\u00a0\u00a0 <a href=\"https:\/\/www.irs.gov\/newsroom\/tax-time-guide-seniors-who-turned-70-12-last-year-must-start-receiving-retirement-plan-payments-by-april-1\">https:\/\/www.irs.gov\/newsroom\/tax-time-guide-seniors-who-turned-70-12-last-year-must-start-receiving-retirement-plan-payments-by-april-1<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>IR-2019-29, March 5, 2019 WASHINGTON \u2014 The Internal Revenue Service today reminded taxpayers that, in most cases, Monday, April 1, 2019, is the date by which persons who turned age [&hellip;]<\/p>\n","protected":false},"author":88892,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4,1,3],"tags":[],"class_list":["post-408","post","type-post","status-publish","format-standard","hentry","category-business","category-general","category-tax-tips"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v24.7 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Tax Time Guide: Seniors who turned 70\u00bd last year must start receiving retirement plan payments by April 1 - Ayoub Sidhum &amp; Co.<\/title>\n<meta name=\"description\" content=\"Ayoub and Associates CPA Firm is a full service Corona CPA firm that provides services in accounting, tax preparation and planning, IRS audit, and sales tax. 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