The IRS issued a reminder for people about the changes in rules for required minimum distributions (RMDs) from retirement accounts. According to the IRS, a retirement plan account owner must normally begin taking an RMD annually starting the year they reach 70 ½ or 72. However, the Setting Every Community Up for Retirement (SECURE) Act changed the rules of retirement.
According to the IRS, the SECURE Act changed the age when individuals must begin taking withdrawals from their retirement accounts. If a person’s 70th birthday is July 1, 2019 or later, they do not have to take their first RMD. This includes individuals who turned age 70 ½ in 2019 and took their first RMD in 2020. Individuals who reached 70 ½ in 2019 or earlier did not have an RMD due for 2020, but they will have an RMD due by Dec. 31, 2021. Individuals who did not reach age 70 ½ in 2019 will reach 72 in 2021 have their first RMD due by April 1, 2022, and their second RMD due by Dec. 31, 2022. After the first year, all RMDs must be made by Dec. 31.
If you want more advice for your 2020 finances, please contact Lakeesha V. Browne, CPA.
“Tax Time Guide: IRS Reminds Taxpayers of Recent Changes to Retirement Plans.” IRS, 16 Mar. 2021, https://www.irs.gov/newsroom/tax-time-guide-irs-reminds-taxpayers-of-recent-changes-to-retirement-plans
Accessed 22 Mar. 2021.
