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Who Has to Take an IRA Distribution in '09
The break doesn't apply to people who have until April to make their 2008 required withdrawals.
By Kimberly Lankford, Contributing Editor, Kiplinger's Personal Finance
January 22, 2009
People older than 70½ are excited that they don't have to take a required minimum distribution from their IRAs and other retirement accounts in 2009. But they have a lot of follow-up questions. Here are some answers.
I will be 70½ on March 28, 2009, and I do not have to take my first required minimum distribution from my IRA until April 1, 2010. Will I benefit from the law that suspends required minimum distributions for 2009?
You're in luck. Even though people who turn 70½ in 2009 would normally have until April 1, 2010, to take their first required distributions, it still counts as their 2009 withdrawal. So you get to benefit from the break, too.
However, you will need to take your 2010 distribution by December 31, 2010 -- just like everyone else.
I turned 70½ in November 2008 and don't need to take my first required minimum distribution until April 1, 2009. Is that distribution suspended, too?
No. Although you have until April 1, 2009, to take your first distribution, it still counts as your 2008 distribution. You will have to withdraw that money by the April 1 deadline. See Treasury to Seniors: Drop Dead for more information. But you won't have to take your 2009 withdrawal this year, thanks to the suspension.
I still work, but I'm older than 70½. Do I need to start taking withdrawals from my 401(k)?
No, employees who continue to work beyond age 70½ are exempt from the rules that apply to taking a required minimum distribution from a 401(k). The exemption does not apply if you are self-employed or own 5% or more of the company.
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Reader Comments (3)
Posted by: Raymond Moissonnier at 12/14/2009 03:01:02 PM
Since we do not have to take an ira distribution for 2009, must we take distributions for 2009 and 2010 next year?
Posted by: Sharon at 12/29/2009 08:09:55 PM
I was 70 1/2 in November of this year, 2009. I want to know if I take my distribution in 2010 before April 2010 will I be able to to use that distribution on my 2009 taxes? Or do I need to take that distribution in December of 2009?
Posted by: rob at 02/18/2010 04:25:54 PM
I will turn 70-1/2 June 6 2010; when do I have to take my first rmd?, Thank you