Hi Reader,
RMD Deadlines: Two Costly Mistakes to Avoid
When it comes to Required Minimum Distributions (RMDs), timing matters!
Know Your Deadlines
The IRS generally gives you until April 1 of the year after you first become subject to RMDs to take your first distribution.
After that, your annual RMD deadline is December 31.
Watch Out for the Double-Distribution Trap!
Delaying your first RMD until the following year means taking TWO distributions in the same calendar year.
That additional taxable income could push you into a higher tax bracket and increase your Medicare premiums two years later through IRMAA.
Miss Your RMD? The Penalties Can Be Costly.
Missing an RMD once carried a 50% penalty!
Thanks to SECURE 2.0, that penalty has been reduced to 25%, and potentially just 10% if you correct the mistake within the required correction window.
The bottom line? Understanding your RMD deadlines can help you avoid unnecessary taxes, higher Medicare premiums, and costly penalties.
Stay tuned as we continue exploring RMD rules and planning opportunities.
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David N. Waldrop, CFP®
Owner of Bridgeview Capital Advisors, Inc. a Registered Investment Advisor.
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