Basic RMD question

[mystang52]

Gotta confess, I'm a bit confused by my own searching. We still have a couple of years before RMD must be done, but can someone answer these basic questions:
DW turns 72 Dec 28, 2023. Is the first RMD required 4/1/2023, or 4/1/2024?
Is that first withdrawal the full amount required, or can the withdrawals be spread out.
If the full amount must be withdrawn by April 1, can the Estimated Taxes be spread out over the year?

 

[CardsFan]

I am not a pro on this, but my understanding is she CAN take the first RMD anytime in 2023, but she MUST take it by 4/1/24 (or is it tax filing day? not sure).

BUT then she MUST take another RMD in 2024. So that would be 2 in one year if you wait into 2024.

As far as estimated taxes, there are several ways to play that game and I will let others with more knowledge answer that one.

 

[MissMolly]

The first RMD is due at any time during 2023. She has up until 04/01/2024 to take her first, but then she will also have to take a second one in 2024, so probably not a good idea to wait. The withdrawals can be taken all at once or spread out over 12 months, or twice a year or whatever schedule you want to take them at so long as you take the entire RMD amount due for the year.

 

[cathy63]

If you wait to take the first RMD in 2024, and you choose to pay estimated taxes, then you have to make timely payments. If you take the RMD between Jan 1 and March 31, you need to make the estimated tax payment by April 15. If you take it on April 1, then you need to pay by June 15.

However, if you pay your tax by withholding, then you can have enough withheld from the second RMD to cover the tax due on both RMDs taken in that year. The IRS treats all tax payments it receives via withholding as if they were made in a timely fashion.

 

[oldtimer]

Don't forget to research Qualified Charitable Distributions (QCD's) if one is charitably inclined. QCD is an above the AGI line deduction that counts as part of RMD - it doesn't get better than that!

 

[TheWizard]

Yes, your RMD liability clock starts ticking on January 1st of the year you turn 72.
If you sell a rental property for a large gain that year, then maybe delay that first RMD till first quarter of following year, but that's the only year you can do that.

For many early retirees following the 4% SWR rule of thumb, starting RMDs can be an almost seamless transition.
Early portfolio withdrawals may have come mostly from your taxable account, but once in RMD-land, they need to come from tax-deferred IRA, 401(k), 403(b), etc.

And you cannot legally do any Roth conversions henceforth until your RMD is complete for the year...

 

[oldtimer]

Yes, your RMD liability clock starts ticking on January 1st of the year you turn 72.
If you sell a rental property for a large gain that year, then maybe delay that first RMD till first quarter of following year, but that's the only year you can do that.

For many early retirees following the 4% SWR rule of thumb, starting RMDs can be an almost seamless transition.
Early portfolio withdrawals may have come mostly from your taxable account, but once in RMD-land, they need to come from tax-deferred IRA, 401(k), 403(b), etc.

And you cannot legally do any Roth conversions henceforth until your RMD is complete for the year...

There is a small loophole if you have multiple IRAs. You can complete the RMD of the smaller of your personal IRA, then do an RMD from that smaller IRA before you take RMD from your larger IRA.