If you turned 70½ in 2014, your Kansas City tax attorney would like to wish you a very happy birthday and remind you that in most cases, you must begin receiving required minimum distributions from Individual Retirement Accounts and/or workplace retirement plans by Wednesday, April 1, 2015. You cannot keep money in your retirement accounts indefinitely. Keep in mind that the April 1 deadline applies to owners of traditional IRAs but not Roth IRAs. It also typically applies to 401(k), 403(b), and 457 plans.
The April 1 deadline applies only to the first year you get such distributions. Every subsequent year the deadline falls on December 31. The required minimum distribution for any given year is the account balance in your retirement account at the end of the previous year divided by a distribution period from IRS’s “Uniform Lifetime Table”. The IRS has worksheets to help you figure the required amount. Your Tax attorney can also help answer questions.
Although the April 1 deadline is required for all traditional IRAs some employees can wait longer to receive disbursements. Employees on some workplace plans can wait until April 1st the year after they’ve retired if their plans allow. In addition, employees of public schools and certain tax-exempt organizations with 403(b) plan accruals prior to 1987 should check with their employer, plan administrator, or provider to see how to treat these accruals. It is also a good idea to begin planning for any distributions that might occur during 2015. Planning for retirement can be complicated, make sure that you are communicating with your tax attorney so that you are not missing retirement income and are following all the tax laws regarding the variety of retirement accounts.
For more information about how your tax attorney can help you please contact us at 913-735-4829