As 2019 enters its home stretch, tax time is probably the last thing most of us are thinking about as the holidays approach. New Year’s Eve will be here before we know it, so it may benefit some self-directed investors to begin contemplating required minimum distributions (RMDs) among other tax-related matters. As written in the Internal Revenue Code, an account holder who made tax-deferred contributions to a Traditional IRA (or a similar pre-tax plan) must begin repayment of those taxes upon reaching a certain age. Accordingly, clients who meet the following criteria will be subject to RMDs:
To calculate your RMD, you’ll need your end-of-year balance from the previous year and a numerical factor that corresponds with your age (other factors may dictate the calculation as well). The distributed funds will be reported as income and indicated on Form 1099-R, which you will receive before the tax filing deadline. Other considerations include:
At New Direction Trust Company, we take pride in the prompt and accurate completion of these transactions. We understand that RMDs may seem like a burden, but we’re happy to help with every step of the process. Please don’t hesitate to give us a call at 877-742-1270 or send us an e-mail at firstname.lastname@example.org if you have any questions. You may also complete our Distribution and Notice of Withholding Form via DocuSign by clicking this link - Begin the RMD process.