If you are someone who has reached the age of 70 ½ years and are required to take money out of your retirement plan, please remember you must do so by December 31st. If you do not take your required minimum distribution (RMD), you will be penalized 50% of the distribution when you file your return.
For those who turned 70 ½ during the year, you have until April 1 st of the year following the year you become 70 ½ to take the distribution. However, should you make that decision, you will need to take 2 distributions during that tax year.
Most payers of the plans have already notified recipients of the amount they are required to take. If you have not received that information you need to visit with your plan holder.
IRS sends soft notices to taxpayers who may need to take RMDs—The IRS is sending Letter 5221 to individuals who:
Own an IRA (traditional, SEP, or SIMPLE)
Are at least 70 ½ years old, and
May not be taking their required minimum distributions.
These are “soft notices,” meaning that they are reminders; no response is needed. Recipients should call the number on the letter 1-855-346-7493 (9 AM – 5 PM CT) if they have questions.