RMD?
Question on what factor to use.
Person turns 70 and a half on 1-1-12. When does the RMD need taken. Is it before April 2012 or need to be taken out by 12-31-12.
What factor should be used. 27.4 or 26.5?
Question on what factor to use.
Person turns 70 and a half on 1-1-12. When does the RMD need taken. Is it before April 2012 or need to be taken out by 12-31-12.
What factor should be used. 27.4 or 26.5?
Permalink Submitted by Alan Spross on Tue, 2012-11-13 04:47
Tom is correct, except for the attained ages. The attained age for the 2012 RMD is the age on 12/31/2012 (71) and for 2013 the age on 12/31/2013 (72). But the account balances used to calculate those RMDs are the balances on the prior 12/31 dates (12/31/2011 for 2012 RMD and 12/31/2012 for the 2013 RMD.
The divisor is 26.5 for the 2012 RMD, whether taken out in 2012 or by 4/1/2013. Person will be 71 on 12/31/2012.
Divisor is 25.6 for the 2013 RMD based on age 72.
It’s possible that taking two RMDs in 2013 could either save on taxes or cost you more. Sometimes having no SS included in income in one year and 85% in another results in less total tax than having SS taxed in both years. It all depends on the amount of SS benefits and other income that exposes SS to inclusion in AGI. The only way to be sure is to run a model both ways using your best estimates. Of course, forecasting with all the expiring tax provisions is more difficult than usual.
Permalink Submitted by george collins on Thu, 2012-11-15 19:22
[quote=”[email protected]“]The further I got into the subject of attained ages the more I confused myself resulting in a couple of edits. Probably had it right the first time in my mind but then started second-guessing myself. Thanks Alan for your response and all the great help you give on this and other forums. You are one dedicated gentleman whom we all deeply appreciate.[/quote]
+1
jerry