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Year-End Retirement Deadlines!

Audio version available here:

Length: approx. 1 min. 15 sec.

Seniors aged 73 years and older with individual retirement arrangements (IRA) should know that before the end of December 31st, 2023, they must take out a minimum distribution for the year. The Required Minimum Distribution (RMD) applies to both Simple IRAs and SEP IRAs, and must be taken out even if you are still employed. If you have an employer-sponsored plan, such as a 401(k), you can delay your RMD until you formally retire.

Required Minimum Distributions are taxed as income, therefore, failing to take out a distribution could result in IRS penalties. IRA owners can have their plan trustee or administrator calculate and report the RMD amount for them, but must ultimately take full responsibility for the amount withdrawn. If the RMD is not taken out of the IRA by the deadline, Form 5329 must be filed with the same year’s tax return. To calculate what your RMD should be, please read this IRS’s resource.

Those who inherited an IRA from the original owner after passing away may need to take out RMDs as well. Certain characteristics of the beneficiary and the original account owner’s death date can affect whether or not an RMD must be made.

Required Minimum Distributions can be confusing and affect your taxes, so we recommend speaking with a tax professional for guidance. Our experts at XQ CPA are just a call or click away, so don’t hesitate to reach out today. We are here to help.

Phone: 832-295-3353

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