If you turned 70 and a half in 2017, you have one more thing to think about before tax season ends: You need to withdraw your required minimum distribution, or RMD, by Sunday, April 1. Your RMD is the minimum amount you must take out of your retirement account each year.
But before you do that, there are some basic things you need to know.
When Is the RMD Deadline?
The IRS requires taxpayers 70 and a half and older to begin withdrawing from certain retirement accounts.
The April 1 deadline is only for those who turned 70 and a half in 2017. If you turned 70 and a half before then, your deadline to take your RMD was Dec. 31.
Which Retirement Accounts Does This Rule Apply to?
According to the IRS, you will need to withdraw an RMD if you have one of the following retirement savings accounts:
- Other defined-contribution plans
If you don’t withdraw the money, you’ll owe big: The IRS says if you don’t take the money at all or don’t take enough, you will have to pay a 50% tax on the amount you didn’t take.
How Much Money Will You Need to Withdraw?
The amount you must take is based on a series of factors, including your age, life expectancy and the amount you have in your retirement account.
Fidelity has a simple required minimum distribution calculator to help you estimate how much you should withdraw before the end of the week.
Desiree Stennett (@desi_stennett) is a staff writer at Codetic.