Time Is Running Out To Make 2014 RMDs
December 31st is just hours away, yet, thousands of people have not withdrawn their 2014 required minimum distributions from their individual retirement accounts. These individuals are facing one of the steepest IRS penalties—a fifty percent excise tax.
While many people think of RMDs as senior only issues, they are not. Not only do IRA owners who are 70 ½ need to withdraw money to satisfy their RMDs, as do beneficiaries of any age. The beneficiary has no RMD requirements until the owner dies. At that time, the beneficiary inherits the IRA, which triggers RMD requirements. The rules and timing are complicated by different requirements based on the owner’s age at death and whether the beneficiary is a spouse, other person or an entity, such as a charity or an estate.
The number of people who miss an RMD is tracked by the Treasury Department. According to a report issued by the Treasury Inspector General for Tax Administration, noncompliance is growing. So, withdraw your RMDs to avoid any penalties.
See Julie Jason, Julie Jason: Be Sure to Withdraw IRA Distributions by Dec. 31, Times Union, Dec. 27, 2014.