If you have reached the age of 70 ½ during 2019, the IRS will require you to start taking withdrawals from your pre-tax retirement accounts. These withdrawal amounts are calculated based on an IRS schedule, based on all established retirement accounts totaled together.
Although not a tax savings tip, this is extremely important as we come to the end of the year. If you don’t take the proper distribution, you risk being taxed at a 50% penalty rate!
Additionally, once RMDs are withdrawn, they will have an impact on your income and your tax bracket, so it is important to pay attention to how much you should be withdrawing and the tax implications that this can have.
It is important to work with a financial or tax professional to ensure you withdraw the correct RMD amount for the current year and plan for the potential tax impact. Please give my office a call (631) 393-2888 for any questions or assistance needed.