RMD Question
One of clients just retired August 31st. He was 71 old this past June. Maxed out his 401(k) in 2018. When is his first RMD Due?
One of clients just retired August 31st. He was 71 old this past June. Maxed out his 401(k) in 2018. When is his first RMD Due?
Permalink Submitted by Alan - IRA critic on Thu, 2018-09-27 23:29
The first RMD distribution year is 2018, but that RMD can be deferred to as late as 4/1/2019. However, if client does an IRA rollover this year, that 2018 RMD must be distributed no later than the rollover date.
Permalink Submitted by Anthony Perrone on Fri, 2018-09-28 13:44
If the client does not rollover the 401k this year then he has until April 1st of 2019 Correct? If he rolls it over to an IRA this year he has to take an RMD by December 31 2018, correct?
Permalink Submitted by David Mertz on Fri, 2018-09-28 17:25
No, the date that the RMD must be distributed is the April 1, 2019 or the date that the distribution being rolled over is made, whichever is earlier. Any RMDs (for the prior year and the current year) must be distributed before or coincident with the distribution that is being rolled over. This means that if the distribution to be rolled over is not made until the beginning of 2019, both the 2018 RMD and the 2019 RMD will need to be distributed before rolling over the remainder no matter when in 2019 the distribution being rolled over is made.
Permalink Submitted by Anthony Perrone on Mon, 2018-10-01 20:14
If he rolls the 401(K) over on March 1st, 2019, is it being counted as 2019 or 2018 income?
Permalink Submitted by Alan - IRA critic on Mon, 2018-10-01 23:07
The 2018 RMD distributed in 2019 (if not distributed in 2018) at the time of the 401k rollover will be taxable in 2019 along with the 2019 RMD due 12/31/2019. Also, note that if he wants to take a portion of the 2018 RMD this year, he can do that with the rest no later than the date of the IRA rollover or 4/1/2019 if the rollover is not done before that.