CHICO — Retirees born before July 1, 1949, will have to take required minimum distributions for the Internal Revenue Service from their retirement plans by Dec. 31.
These payments are normally made by the end of the year, according to a news release. Those who turned 70 years and six months in 2019 are allowed to wait until April 1, 2020, to take their first payment distributions. This special deadline only applies to the first year.
For all subsequent years, these payments must be made by Dec. 31. A trustee must report the amount of the payment to the individual retirement account owner or may offer to calculate the amount for the owner.
A trustee must also calculate the payment separately for each IRA owned. However, they can choose to withdraw the total amount from one or more of the IRAs — whereas payments required from workplace retirement plans must be taken separately from each account.
These payments are based on the taxpayer’s life expectancy and their account balance.
Individuals can use online worksheets on the IRS website to figure out the minimum distribution amount. The 2018 Form 5498 is normally issued to the owner during January 2019.
These rules are mandatory for all owners of IRAs and participants in workplace retirement plans. However, some people in workplace plans can wait longer to receive their payments.
If their plan allows, current employees can wait until April 1 of the year following retirement to start taking these distribution payments, regardless of their age. However, there may be tax consequences to doing so.
Find more information, including answers to frequently asked questions, at irs.gov or reach out to the IRS local taxpayer assistance office, 1395 Ridgewood Drive, Chico, 343-2324.
