IRA Required Minimum Distribution

IRA account owners who attained age 70½ during 2018 must take a required minimum distribution (RMD) by April 1st of this year and every year thereafter.

A required minimum distribution (RMD) is based, in most cases, on the IRA account owner’s life expectancy.

Rules for Calculating RMDs

The account owner’s life expectancy will be calculated based on the Uniform Life Expectancy tables in IRS Publication 590-B.  Most people will use Table III (Uniform Lifetime).

You may need to use different Life Expectancy tables if any of the following are true for you:

Your designated beneficiary is your sole-spouse beneficiary and he/she is more than 10 years younger (Table II).

You are the beneficiary of the account owner and the account owner is deceased

Both tables can be found in the appendices to Publication 590-B.

Please note that you may need to adjust your Fair Market Value because of outstanding transfers, rollovers, or recharacterizations at year-end when making this calculation.

More Than One IRA

If you have more than one Traditional IRA account, you must determine the required minimum distribution separately for each IRA.  However, you can total these minimum accounts and take the entire amount from any one or more of the IRAs.

Penalty on Amount Not Taken

It is important to remember that you, as the IRA owner, are responsible for ensuring that you have received a distribution of at least the required minimum amount even if you have established a schedule of installment payments.  If a required minimum distribution is not withdrawn by the appropriate deadline, you may be subject to a 50% IRS penalty on the amount not taken.