Taking 2 RMD, as passed RMD #1, went to April 1 of following tax year

Submitted by Steven Davis on Sat, 2023-01-28 19:35

A lot is said that waiting till April 1, of the year after obtaining 72 is difficult as one who does this, has to take in this example a PAIR of RMD’s April 1 of 2023 & by Dec 31, 2023.

In this case, Wages ended in late 2022 so the bunching of 2 draws in 2023 is not a problem.

What I did not see guidance on was the balance of the account for calculation.
In the example of an age 72, delaying to 2023 that calculation for both RMD’s (April 1, and By Dec 31 2023) would be using the age factor of 26.5 (Age 73 during 2023)

Years ago I saw this and the prior years balance on 12/31 was used for April 1 draw.
Then I believe it was for second draw, using the 12/31 balance LESS the April 1 draw.

Could not see this in any law, if not allowed to reduce by the first draw the by April 1 draw and the before Dec 31 draw would be identical.

So is it allowed to remove the by April 1 distribution off the balance?



Submitted by Alan - IRA critic on Sat, 2023-01-28 22:53

  • No. When the first RMD is deferred to the following year it will cause the 12/31 balance of the first year to be around 3.7% higher than it would have been had the first year RMD been distributed in the first year. The second year RMD uses the actual prior year end balance with no adjusments to determine the RMD. 
  • Another way of putting this is that the actual prior year end balance is used to determine the next year’s RMD, and this applies to the first 2 RMDs as well. Deferring the entire first year RMD to year 2 will make the second year RMD about 3.7% larger than it would have been had the first year RMD been withdrawn in the first year. All distributions are taxable in the year received.
  • However, in certain situations deferring can still save on the total tax bill for the two years.

Submitted by David Mertz on Sun, 2023-01-29 03:46

Delaying the first RMD until 2023 does not change the RMD for 2022.  It’s still the 2021 year-end balance divided by 27.4.  Only the calculation of the RMD for 2023 uses the 26.5 factor, divided into the 2022 year-end balance.

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