Articles

Taxpayers Must Take Required Retirement Plan Distributions By April 1 Deadline by Rick D. Bazzani, CPA


Posted on March 23, 2015 by Rick Bazzani

Taxpayers who turned 70 ½ in 2014 must take the required minimum distributions (RMD) from their IRAs and employer-sponsored plans, such as 401(k)s, 403(b)s and 457s, by April 1, 2015.

 

The April deadline applies only to first-year RMDs. For all subsequent years, taxpayers must make a RMD by December 31. A taxpayer who takes his or her first RMD by April 1, must make a second distribution by the end of 2015. In addition, taxpayers who are still working can wait until April 1 of the year after they retire to take the RMD, if permitted by their retirement plans.

 

Calculating the RMD is based on the balance in one’s retirement plan on Dec. 31, 2013, and his or her life expectancy as of his or her 2014 birthday. Taxpayers must make this calculation for each IRA he or she owns, but the RMD may be taken from one or more of the accounts. Different calculations apply when a taxpayer is married to a spouse who is more than 10 years younger and is the taxpayer’s only beneficiary.

 

In most cases, failure to take a RMD by the deadline will result in a 50 percent penalty on the amount not withdrawn.

 

About the Author: Rick D. Bazzani, CPA, is a senior manager in Berkowitz Pollack Brant’s Tax Services practice. He can be reached in the firm’s Ft. Lauderdale CPA office (954) 712-7000 or at info@bpbcpa.com.