WASHINGTON, D.C. — The Internal Revenue Service (IRS) has issued a reminder to retirees that individuals who turn 73 in 2024 must begin taking Required Minimum Distributions (RMDs) from qualified retirement accounts by April 1, 2025. This obligation applies to traditional Individual Retirement Arrangements (IRAs), 401(k)s, and other workplace retirement plans.
The April 1 deadline applies only to the first RMD, which covers the year 2024. For subsequent years, RMDs must be withdrawn annually by December 31. Retirees taking their first distribution by the April 2025 deadline may end up with two taxable distributions within the same year, as the second RMD for 2025 is also due before year-end. Both distributions must be reported on taxpayers’ 2025 federal income tax returns.
The RMD rules are mandatory for traditional, Simplified Employee Pension (SEP), and Savings Incentive Match Plan for Employees (SIMPLE) IRAs, along with workplace plans such as 401(k), 403(b), and 457(b). Roth IRAs, however, are not subject to RMDs during the account owner’s lifetime.
Exceptions exist for certain individuals in workplace retirement plans who may defer their first distributions until retirement, provided the plan permits it. This exception does not extend to participants who are 5% business owners or to SEP and SIMPLE IRA plans. Accrued balances in pre-1987 403(b) plans may also be treated differently, and affected individuals should consult their plan provider for guidance.
The IRS requires IRA trustees to inform account owners of their RMD amounts or provide calculation assistance. These amounts are often stated on Form 5498, IRA Contribution Information, which is issued early in the calendar year.
Retirees are urged to fully understand these rules and begin their planning early to avoid any penalties for missed distributions. By meeting these requirements, retirees can ensure both compliance with federal tax law and efficient management of their retirement savings.
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