Do I Have to Take RMDs From Every Account That I Have?
By Beverly DeVeny and Jeffrey Levine
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This week’s Slott Report Mailbag, proudly sponsored by GoldCo Precious Metals, examines if you have to take RMDs (required minimum distributions) from every account you have and answers if your traditional IRA is tax deductible. As always, we recommend that you work with a competent, educated financial advisor to keep your retirement nest egg safe and secure. You can find one in your area here.
1.
Do I have to take my required distribution from every account that I have?
Answer:
You can receive our laser-like focus on RMDs (required minimum distributions) in this month’s IRA Focus. Subscribe here.
Now to answer your question, generally, yes. There is an exception for IRA accounts. You can calculate your distribution from each account that you have and then combine the distributions from all like accounts and take the distribution from one or any combination of those like accounts that you have. Like accounts are all accounts you own or all accounts inherited from the same person. Roth IRAs are considered their own separate category of IRA. The same exception exists for 403(b) accounts.
Under no circumstances can you take an IRA distribution from an account other than an IRA, a Roth distribution from an account other than a Roth, or an employer plan distribution from any other plan you might have.
2.
Is my traditional IRA contribution deductible?
Answer:
If neither you nor your spouse is covered by an employer retirement plan, your IRA contribution will be 100% deductible, regardless of your income. If either one of you is covered by a plan, your contribution may not be deductible or it may be partially deductible. The deductibility limits change each year. See IRS Publication 590 for the current deductibility limits. There is a box on your W-2 Form from your employer that will tell you if you are considered to be covered by an employer plan. You will need to report any non-deductible traditional IRA contributions on IRS Form 8606, which is filed with your tax return.
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This week’s Slott Report Mailbag is sponsored by:
GoldCo Precious Metals
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