• What is an MRD and why must I take one?
• What happens if I do not take my MRD?
• When is an MRD required to begin?
• Do I have to take an MRD on the day that I attain age 70 1/2?
• After the first year, can I wait until April 1 of each subsequent year to take my first distribution?
• If I attain age 70 1/2 this year should I wait until April 1 of next year to take my first distribution?
• How do I determine the amount of my MRD?
• Where do I obtain the life expectancy factor?
• How do I obtain the life expectancy from the Uniform Lifetime Table?
• Can you give me an example of how I would calculate my MRD if I attained age 74 on January 15th of this year and the value of my account on December 31st of last year was $100,000?  My daughter is the primary beneficary on my account.
• If I have more than one IRA account, do I have to take MRDs from each account?
• Are my MRDs subject to Federal Income taxes?
• Does the IRS know I am required to take an MRD?
• If I take more than my MRD amount in one year can I apply the excess to the next year?
• Are MRDs required from my Roth IRA
• Can I roll my MRD over to a Roth IRA?

What is an MRD and why must I take one?

An MRD is the required minimum distribution amount that an IRA owner must withdraw from his or her account each year. You must take MRDs in order to comply with IRS regulations.

What happens if I do not take my MRD?

Then you are subject to a 50% penalty tax on the amount that was not withdrawn.

When is an MRD required to begin?

MRDs are required to begin when a person attains the age of 701/2.

Do I have to take an MRD on the day that I attain age 70 1/2?

No. You may take your MRD anytime during the year you attain age 701/2. You may also delay taking your first distribution until April 1 following the year you attain age 701/2 if you desire.

After the first year, can I wait until April 1 of each subsequent year to take the next distribution?

No. The April 1 deadline only applies to the first distribution year. Distributions in subsequent years must be made by December 31 of each year.

If I attain age 701/2 this year should I wait until April 1 of next year to take my first distribution?

That will depend on the amount of the distribution and how it affects your income tax situations in both years. If you wait until April 1, you will have to take 2 distributions next year because next year’s distribution must be taken by December 31.

How do I determine the amount of my MRD?

You divide the value of your account as of December 31 of the previous year by a life expectancy factor.

Where do I obtain the life expectancy factor?

The life expectancy factor may be obtained from tables in IRS Publication 590. Most IRA owners use the life expectancy factor from the Uniform Lifetime Table*. The only time this table would not be used is when the IRA owner’s spouse is designated as the only primary beneficiary on the account AND is more than 10 years younger than the IRA owner. In this situation, the factor would be obtained from the Joint Life and Last Survivor Expectancy Table.

How do I obtain the life expectancy from the Uniform Lifetime Table?

You find your age under the Age column and the number next to it under the Life Expectancy Factor column is your life expectancy. Your age for these purposes is the age that you will attain in the calendar year.

Can you give me an example of how I would calculate my RMD if I attained age 74 on January 15th of this year and the value of my account on December 31st of last year was $100,000? My daughter is the primary beneficiary on my account.

Your MRD for this year would be $4,201.68. This is calculated by dividing the value of your account on December 31st of last year ($100,000) by your life expectancy from the table (23.8).

If I have more than one IRA account, do I have to take MRDs from each account?

No. Although, you must calculate your MRD on each account, you may add those amounts together and take the total from any one or more of your accounts.

Are my MRDs subject to Federal Income taxes?

Yes. However, if you have made nondeductible IRA contributions in the past, then a portion of the distributions may be free from federal income taxes.

Does the IRS know if I am required to take an MRD?

Yes. IRA Custodians/Trustees must notify the IRS on Form 5498 that an MRD is required for an account.

If I take more than my MRD amount in one year can I apply the excess to the next year?

No. This is not permitted.

Are RMDs required from my Roth IRA?

No. RMDs are not required from your Roth IRA. However, upon death your nonspouse beneficiaries will be required to take distributions.

Can I roll my MRD over to a Roth IRA?

No. This is not permitted.

The Uniform Lifetime Table

(Column titled % of Account converts the life expectancy to a percentage of the account)

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