Wednesday, February 4, 2009
Minimum IRA Distributions (MRD)
Breaking news! Most seniors should know by now that a congressional amendment recently went into place allowing those over the age of 70 1/2 to waive taking those distributions (RMD) to be taxed from their IRA's. Caution though, it is only good for 2009. After that the amendment is set to expire unless its renewed for another year.
Waiver of 2009 Required Minimum Distributions
On Tuesday, December 23, 2008, President Bush signed into law H.R. 7327, the Worker, Retiree, and Employer Recovery Act of 2008, which waives the 2009 required minimum distribution (RMD) from individual retirement accounts (IRAs) and plans, such as:
Traditional IRAs
Simplified Employee Pension (SEP) IRAs
Savings Incentive Match Plan for Employees (SIMPLE) IRAs
Inherited IRAs, including inherited Roth IRAs
Defined Contribution Plans [such as 401(k), Profit Sharing, and Money Purchase plans]
403(b)(7) custodial accounts.
This means that if you are turning age 70½ in 2009, you are not required to begin taking the RMD from your retirement account in 2009. If you are over age 70½, you are not required to continue to take your RMD for 2009.
You may still choose to take a distribution, although it is not required. As a reminder, if you turned age 70½ during 2008, then you must continue to meet your RMD for 2008.
You have until April 1, 2009, to complete your RMD requirement. If you are over age 70½, you are also required to continue your RMD for 2008
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