H&R Block Presents – REQUIRED MINIMUM DISTRIBUTIONS
By Rosalyn Partin, Manchester H&R Block
If you are age 72 (or 70 ½ if you were born before July 1, 1949), you are required to withdraw a minimum amount each year from your retirement plan investments (excluding Roth IRAs). Your Required Minimum Distribution (RMD) amount for 2021 depends on the balance in your retirement accounts as of the end of 2020 and your life expectancy (as determined by the IRS). Your RMD can be withdrawn in multiple payments throughout the year or in one lump sum payment. If you have multiple accounts, you are allowed to take your RMD amount from any account or a combination of accounts, as long as you take out the total amount required by the end of the calendar year.
The RMD was waived for calendar year 2020 due to COVID, but withdrawals are required for calendar year 2021.
If you fail to take your Required Minimum Distribution or you withdraw less than what you are required, a 50% excise tax is imposed on the amount not withdrawn. This excise tax is assessed on the individual for the year of the shortfall and reported on your tax return.
If you haven’t already taken your Required Minimum Distribution, you should contact your investment advisor or retirement plan holder soon to make sure you meet the RMD rules by the end of the year.
If you have questions about retirement plans and your Required Minimum Distribution, please call your local H&R Block office. In Manchester TN call 931-728-9462. H&R Block Has Your Back!
