Before you get started
The Internal Revenue Service (IRS) requires you begin taking money annually from your traditional, SIMPLE and SEP individual retirement accounts (IRAs) when you reach age 73. For some retirement accounts, including 403(b)s, you must generally begin taking RMDs when you reach age 73 or the year in which you retire, if later.
Things to consider
- IRA distributions, including any federal and/or state tax withholding, taken during the calendar year are reported on Form 1099-R. View the tax form schedule to see when forms will be available.
- RMDs are coded as “normal distributions" on Form 1099-R. They are generally taxed as ordinary income and counted toward your total taxable income for the year.
- Your RMD must be calculated separately for each IRA you own. However, you can withdraw the total amount from one or more of your IRAs.
- If you fail to take your total RMD amount in a year, you may be subject to a 25% tax penalty on any amount that wasn’t withdrawn.
