RMD – AKA Required Minimum Distributions – the Governments’ mandate of distribution from our IRA (Pre-Tax) funds in order to finally occur taxes is upon us…..
RMD Season 
In the coming weeks we will begin transferring mandated funds from our IRA/Qualified/Pre-Tax accounts to their directed destinations….
As a reminder this is so the US Government gets to take the taxes due …
IMPORTANT (Neat) Facts –
- RMD $$ mandated amounts are determined by the value of applicable accounts on the last day of the prior year
- Current year age is a necessary factor included in calculating the RMD – see below next, first time exception – each year of seasoning (getting older) we are forced to take more out of the applicable accounts – hey the IRS has never taxed us on these in many cases – it’s their time!
- After tax contributions to a qualified account MUST be accounted for in order to avoid taxes – here are greater details and our taxpayer obligations on this – don’t overpay – the IRS is not tracking this and will not come to the rescue and lower your taxes
- All of an individual’s accounts must be included/totaled/value (certain exceptions are made to those continuing to work) to ascertain the needed distribution
- Any one account can be used to satisfy the needed distribution (you do not have to take a little from each account, making it easier from an organization standpoint) BUT you must take at least the minimum distribution
- Failure to take the mandated distribution amount COULD result in a 100% tax – Break in – our experience has been the IRS is nice about this, but let’s not test them
Here is a neat three part series from a while back that is worth a review!
70.5 is the key starting age
The mandatory commencement date of RMD’s is the year AFTER you turn 70.5 years young, under current tax law…
If you accept this first year deferral, you will incur two RMD’s in the year you commence your first RMD…
Depending on the situation, it may be advisable to distribute your first year RMD a year early so as not to clump your taxable distribution….
Is your DOB between 7-1-47 to 6-30-48?
Then you turn 70.5 in 2018 and you CAN defer your RMD until 2019, however you will have two RMD’s next year — be careful, large distributions could toss you into an extra tax bracket.
Reach out if you have ANY questions, we have plenty of time, BUT the clock is ticking…
Have a great ‘RMD Efficient Distribution” Day!
John A. Kvale CFA, CFP
November 2017 Podcast Video, Financial Planning and Capital Market Update- By John Kvale
Here is our November 2017 Monthly review. If you are too busy to read, feel free to listen as we describe our post and thoughts in friendly podcast format.
November 2017 Video
Thank You Holiday Party Goers!
Financial Planning Tip(s)-
RMD – Required Minimum Distribution Reminder
In our post here this month, we reminded all of those with birthdays between 7-1-46 and 6-30-47 that have the unique option of deferring their first mandatory RMD taxable distribution to next year, but if you do that will mean you need to take two distributions in the same year.
Considerations:
The first year is the only time we get this option, all the future years are mandatory with not option.
Capital Market Comments
A lot of positive indicators – Markets taking notice
It appears the US and Global Economies are finally making a synched recovery. Capital Markets are taking notice.
As we mentioned here, Unemployment rate hit a very low 4.1%
This time, International Markets have wind in their sails as well….
MSCI Global Index
See you on the other side of a New Year !
Happy Fall Season!
John A. Kvale CFA, CFP
Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
www.jkfinancialinc.com
www.street-cents.com
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Posted in General Financial Planning, Investing/Financial Planning, Market Comments, Monthly Review, Tax Related, Video
Tagged Deferred RMD, EFA, Global Growth, MSCI, Required Minimum Distribution, RMD