INTEGRITY ADVISORY GROUP
Like many of our clients, you probably have an IRA. And there is a real chance that it is the largest financial asset you own. Like many of our clients, you may not understand exactly what an “RMD” is.
Definition: A minimum amount that must be withdrawn from tax-advantaged retirement plans and accounts each year, beginning the calendar year after the account holder reaches age 70 ½. These guidelines are established by the IRS.
Frequently Asked Questions:
Q: How much income tax do I have to pay on my RMD?
A: If you take money out of your IRA, it’s taxable at your minimum tax rate, the lower the capital games rate doesn’t apply.
Q: Do all states have the same tax laws on RMD’s?
A: RMD’s receive different tax treatment in different states. These differences could present opportunities for you to manage your tax bill and cash flow more efficiently.
Q: Suppose I don’t take anything out? No tax, right?
A: Yes, but you cannot keep money in your IRA indefinitely. There comes a day of reckoning. And you must begin removing money by April 1 of the year following the year you turn 70 ½. The means that if, for example, you turned 70 ½ at any time this year, your first payment is due by April 1 of next year.
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