A required minimum distribution, or RMD, is the minimum amount that certain retirement-account owners or beneficiaries must withdraw under federal rules. The first question is whether a distribution is required for this account and this year. A traditional IRA, a workplace plan, a Roth account, and an inherited account can have different answers.
Inventory every account and beneficiary status
List each traditional IRA and employer plan, the prior December 31 balance, the owner’s age, and any inherited status. The IRS generally calculates an RMD using the prior year-end balance divided by an applicable life-expectancy factor. Certain IRA RMD amounts can be combined and taken from one IRA, but employer plan rules differ; verify before moving funds.
Give inherited accounts special attention
Beneficiary rules depend on the original owner’s date of death, whether distributions had begun, and the beneficiary’s relationship and eligibility. A 10-year deadline does not always mean there are no annual distribution requirements. Publication 590-B and the IRS beneficiary guidance explain the categories.
Plan timing and tax withholding
Check custodian processing deadlines well before year-end. A first-year delay may be available in some cases, but taking two taxable distributions in one year can change the tax result. Coordinate withdrawals with other income, charitable plans, and withholding. Keep confirmations for the return.
Read more from the IRS
- IRS Publication 590-B, Distributions from Individual Retirement Arrangements
- IRS, Required Minimum Distributions FAQs
This article provides general educational information, not advice for a particular tax, accounting, legal, or investment situation. Rules and forms can change; review your facts with a qualified professional.