When you withdraw your first RMD may impact your taxes. You may wonder how that can happen, and with tax season approaching, we thought it best to draw your attention to a nuance you may not be aware of. Typically, you have until December 31 to take your full distribution—or if you’re taking your first RMD, April 1 the following year. Take note that if you decide to delay your initial distribution until April, your second RMD will be due on December 31 of that year as well. Two sizable, taxable withdrawals in the same tax year can more easily bump you into a higher bracket, so it’s often best to take your first distribution in the calendar year that you reach your RMD age. Once you start withdrawing funds, you should remain vigilant because your account balances will continue to fluctuate—and with them your RMDs. Call us for ideas of where to put your RMDs to further provide income in retirement.
However, it’s important to also consult a qualified tax professional for questions like these.