Tag Archives: First RMD

RMD Adjustment Season – Holiday Weekend – Friday

Required Minimum Distributions (RMD) are the mandated distributions of funds from Qualified plans such as IRA’s, 401k’s and the like.

Here, here and here we discuss RMD’s and differing techniques to appease Uncle Sam/IRS in great detail…Uncle Sam

Since RMD’s amounts are based on age and prior year ending account balance the mandatory amount changes year by year.

One option we like is spreading your RMD out over the year, creating your own “Person Pension” plan – of course as long as you take at least what Uncle Sam says, you are good…

Bottom Line – this is RMD adjustment season.

Monday is a holiday in honor of Martin Luther King, and as such markets, banks and our office will be closed.

Ahhhh….. today is a Friday as we brace for the coldest front of the year – and of course an out-door tennis tournament is calling (the girls get warm in about 5 minutes – parents freeze! All good)

Have a Good Weekend!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.


Is Your Birthday between 7-1-46 and 6-30-47? If so you have an important decision! RMD – Required Minimum Distribution – Delay or Not?

According to current law, the IRS mandates RMD’s (Required Minimum Distributions) from your qualified account by April 1 of the year following age 70.5.

RMD Delay First YearUncle Sam

Given the above IRS requirement, it is possible to delay your first RMD until April 1 of the following year, once you reach the 70.5 threshold.

If your Birthday as of the year 2017 is between 7-1-46 and 6-30-47 YOU CAN delay your initial mandated RMD, however by doing this, you will have two RMD’s in 2018 tax year.

  • Higher/Lower Income
  • Bigger/Smaller Expenses
  • More/Less Donations

These are a few items to consider when delaying or taking that initial RMD.

Feel free to reach out to us if you have any questions!

After this decision … the IRS makes it easy, each year take your RMD and pay the taxes, only on the first RMD, is the delay allowed!

Have a great “Smart Tax Delay” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.

If You Turned 70 Between July 1, 2010, and June 30, 2011, Watch Out For the Double Tax Whammy!

A Required Minimum Distribution (RMD) is a mandatory taxable distribution for those owning IRA/Pre-Tax saving investments. You must take your first RMD by April 1 of the first tax year after you turn 70.5. Watch out, as you may end up with a mandatory double whammy distribution in your first RMD tax year, if you are not careful.

RMD’s are the mandatory taxable distributions of funds out of IRA and other pre-tax investment vehicles in order for the US Government to begin collecting taxes on these deferred assets. (Click Here for a good IRS summary chart.)

If you have turned 70 between Jan 1 and June 30, 2011 you have a decision to make. You may defer your distribution until April 1, 2012, HOWEVER, if you do, you will have two distributions mandated next year, 2012; this year’s (2011) delayed RMD, and your regularly scheduled RMD that is mandatory by the end of 2012.

If you fall into this window, consider the possibility of eliminating the double whammy by taking your 2011/first year RMD, by 12-31-2011.

There is one very small exclusion from the mandatory RMD commencements, which applies to individuals working at a company, who are not a 5% owners of the company, and who have not taken a RMD yet. If you fit into this small little box, you MAY be offered an exception to the RMD. Understand the IRS has offered tax payers ample deferral time, i.e. 70.5 years, and are not in favor of missing their eventual tax payments. Bottom line, if you think you fit into this little box, make sure you do, before claiming exemption from your RMD!

Every situation is different, and remember to consult your CPA or tax advisor for exact numbers. Feel free to contact us for further clarifications and estimates on your RMD amounts as well.

Have a Great Day!