{"id":155,"date":"2018-03-27T13:17:13","date_gmt":"2018-03-27T13:17:13","guid":{"rendered":"http:\/\/bookkeepingoutsourcingsolutions.com\/blog\/?p=155"},"modified":"2019-05-21T08:06:24","modified_gmt":"2019-05-21T08:06:24","slug":"deadline-for-retirement-plan-distributions-is-fast-approaching","status":"publish","type":"post","link":"https:\/\/bookkeepingoutsourcingsolutions.com\/blog\/deadline-for-retirement-plan-distributions-is-fast-approaching\/","title":{"rendered":"Deadline for Retirement Plan Distributions is fast Approaching"},"content":{"rendered":"<p>If the <strong>taxpayer turned 70 and half during the tax year of 2017<\/strong>, then he\/she <strong>is eligible to start receiving the required minimum distributions<\/strong> <strong>(RMD)<\/strong> from Individual Retirement Accounts (IRA) and any workplace retirement <strong>plan by April 1, 2018<\/strong>.<\/p>\n<p>&nbsp;<\/p>\n<p><strong>April 1<sup>st<\/sup> is the deadline that applies to owners of IRAs, traditional, SEP and SIMPLE accounts, but not Roth IRAs.<\/strong> The workplace retirements plans included are 401(k), 403(b) and 457(b) plans. This April 1<sup>st<\/sup> deadline only applies to the first year of required distribution, <strong>for all following years the required minimum distributions deadline will be December 31<sup>st<\/sup><\/strong>. That being said, all taxpayers who turned 70 and half in 2017 will receive the first required distribution on April 1<sup>st<\/sup>, and also will receive a second required distribution on December 31<sup>st<\/sup>.<\/p>\n<p>&nbsp;<\/p>\n<p>In order to figure out the amount of required minimum distributions, all <strong>taxpayers 70 and half in 2017 must use their life expectancy as of their birthday in 2017<\/strong>, and the account balance as of December 31, 2016. <strong>Trustee must report the year-end value on the IRA account to the owner through Box 5 in Form 5498<\/strong>,<em> IRA Contribution Information<\/em>. All paper work to figure out amount based on life expectancy can be found in the appendices of Publication 590-B, <a href=\"https:\/\/www.irs.gov\/pub\/irs-pdf\/p590b.pdf\"><em>Distributions from Individual Retirement Arrangements<\/em><\/a> (IRAs).<\/p>\n<p>&nbsp;<\/p>\n<p>Taxpayers may use Table III (Uniform Lifetime) to figure out their RMD. <strong>If eligible taxpayer reached both the ages of 70 and half and 71 years of age in 2017, then their distribution period would be of 26.5 years.<\/strong> There is a separate table, Table II, for an eligible taxpayer with a spouse who is 10 or more years younger and a beneficiary. Both tables can be found on the appendices of Publication 590-B.<\/p>\n<p>&nbsp;<\/p>\n<p>April 1<sup>st<\/sup> is the mandatory deadline for owners of Traditional IRAs, and most of the owners of workplace retirement plans, <strong>others with workplace plans can wait a while to receive their RMD.<\/strong> This usually applies to employees who are still working, and if their workplace plan allows, can wait until April 1<sup>st<\/sup> of the year after their retirement to start receiving distributions. <strong>If taxpayer is an employee of the Public School system or certain tax-exempt organizations who have 403(b) plans before 1987 should check with employer, plan administrator\/provider to see how to handle the plan. <\/strong><\/p>\n<p>&nbsp;<\/p>\n<p>It is encouraged to start planning for any required distributions a taxpayer may be eligible for in 2018. A trustee must report the amount of the RMD account to the taxpayer, or an offer must be made by the trustee to help calculate the RMD. <strong>The trustee should present the RMD amount on Form 5498, Box 12b, for the year of 2018, <\/strong>the amount can be found on Form 5498 issued in January 2018.<\/p>\n<p>&nbsp;<\/p>\n<p>IRA owners may use an<strong> IRA qualified charitable distribution (QCD) account to pay a charity<\/strong> as part of their RMD obligation. This is <strong>only available to IRA owners 70 and half or older, the maximum annual exclusion for a QCD is $100,000<\/strong>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>If the taxpayer turned 70 and half during the tax year of 2017, then he\/she&#8230;<\/p>\n","protected":false},"author":1,"featured_media":50,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7,14,12,16],"tags":[],"class_list":["post-155","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-accounting","category-budgeting","category-tax","category-tax-laws"],"_links":{"self":[{"href":"https:\/\/bookkeepingoutsourcingsolutions.com\/blog\/wp-json\/wp\/v2\/posts\/155","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bookkeepingoutsourcingsolutions.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bookkeepingoutsourcingsolutions.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/bookkeepingoutsourcingsolutions.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/bookkeepingoutsourcingsolutions.com\/blog\/wp-json\/wp\/v2\/comments?post=155"}],"version-history":[{"count":1,"href":"https:\/\/bookkeepingoutsourcingsolutions.com\/blog\/wp-json\/wp\/v2\/posts\/155\/revisions"}],"predecessor-version":[{"id":156,"href":"https:\/\/bookkeepingoutsourcingsolutions.com\/blog\/wp-json\/wp\/v2\/posts\/155\/revisions\/156"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bookkeepingoutsourcingsolutions.com\/blog\/wp-json\/wp\/v2\/media\/50"}],"wp:attachment":[{"href":"https:\/\/bookkeepingoutsourcingsolutions.com\/blog\/wp-json\/wp\/v2\/media?parent=155"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bookkeepingoutsourcingsolutions.com\/blog\/wp-json\/wp\/v2\/categories?post=155"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bookkeepingoutsourcingsolutions.com\/blog\/wp-json\/wp\/v2\/tags?post=155"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}