There's still time to beat the RMD deadline and withdraw your required minimum distribution from your traditional IRA, 401(k) or other retirement account (except a Roth IRA) for 2022…but you better hurry! The due date for taking this year's RMD is December 31 for most seniors who are at least 72 years old. That's just a few weeks away!
And if you don't take enough out of your retirement plans this year, you could be hit with a 50% penalty from the IRS on the amount not distributed as required. That's a big penalty that you certainly want to avoid.
More Time Allowed to Take Your RMD?
Some people have more time to take their 2022 RMD. For example, if you turned 72 in 2022, you actually have until April 1, 2023, to take your first RMD. (Use our handy RMD calculator to determine when you have to take your first RMD.) You don't have to wait until April 1, but it's an option.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
If you're still working and don't own at least 5% of the company, you can also delay taking RMDs from your current employer's 401(k) plan until April 1 of the year after the year you retire. Again, it's your choice.
If you delay your first RMD to April 1, you'll have to take two RMDs in 2023, which could trigger unintended consequences that increase your tax bill. For example, two RMDs in one year might kick you into a higher tax bracket or affect the amount of Social Security benefits that are subject to tax. One the other hand, if you had a lot of income in 2022, it might make sense to delay your first RMD to avoid similar problems this year. It all depends on your circumstances.
Calculating Your RMD
Generally, the minimum amount you're required to withdraw in 2022 is calculated by dividing the account balance at the end of 2021 by a life expectancy factor that the IRS publishes in Publication 590-B. (Again, we've created an easy-to-use tool that computes RMDs from traditional IRAs for you.) Fortunately, thanks to changes to the life expectancy tables, most seniors will have smaller RMDs for 2022 when compared to previous years.
If you have more than one traditional IRA, you need to determine a separate RMD for each IRA, but you can add up the RMD amounts and take the total from any one or more of your IRAs. However, if you have multiple 401(k) accounts, you have to calculate and take the RMD from each plan separately. (Your 401(k) plan sponsor or administrator should calculate the RMD for you.)
Waiver of RMD Penalty
You may be able to avoid the 50% penalty tax. You can request a waiver if your failure to take the RMD is due to a reasonable error and take whatever steps are necessary to increase your distribution to the required level. To request a waiver, submit Form 5329 with a statement explaining the error and the steps you're taking make things right.
Steps to Take Now
If you haven't withdrawn the necessary funds yet from any retirement account, don't delay. Contact the financial institution administering your account right away and set up a distribution (you might want to take out a little extra for your RMD to take care of estimated tax payments).
Most large financial institutions allow you to set up an RMD online. Some companies will even process an RMD automatically if they don't receive a completed form or online request before the deadline (so you aren't hit with a penalty). However, at this time of year, the most important thing is that you get the ball rolling now!
-
Dow Adds 646 Points, Hits New Highs: Stock Market TodayIt was "boom" for the Dow but "bust" for the Nasdaq following a December Fed meeting that was less hawkish than expected.
-
5 Types of Gifts the IRS Won’t Tax: Even If They’re BigGift Tax Several categories of gifts don’t count toward annual gift tax limits. Here's what you need to know.
-
The 'Scrooge' Strategy: How to Turn Your Old Junk Into a Tax DeductionTax Deductions We break down the IRS rules for non-cash charitable contributions. Plus, here's a handy checklist before you donate to charity this year.
-
The 'Scrooge' Strategy: How to Turn Your Old Junk Into a Tax Deduction
Tax Deductions We break down the IRS rules for non-cash charitable contributions. Plus, here's a handy checklist before you donate to charity this year.
-
IRS Says You Made a Tax Return Mistake? A New Law Could Help You Fight BackTax Law Updated taxpayer protections change what the IRS must explain on error notices and how long you have to respond.
-
Tax Refund Alert: House GOP Predicts 'Average' $1,000 Payouts in 2026Tax Refunds Here's how the IRS tax refund outlook for 2026 is changing and what steps you can take now to prepare.
-
New 2026 Tax Change Could Mean More for Your IRA and 401(k) SavingsRetirement Savings Here's how the new IRS inflation adjustments will increase the contribution limits for your 401(k) and IRA in the new year.
-
3 Ways High-Income Earners Can Maximize Their Charitable Donations in 2025Tax Deductions New charitable giving tax rules will soon lower your deduction for donations to charity — here’s what you should do now.
-
10 Retirement Tax Plan Moves to Make Before December 31Retirement Taxes Proactively reviewing your health coverage, RMDs and IRAs can lower retirement taxes in 2025 and 2026. Here’s how.
-
When to Hire a Tax Pro: The Age Most Americans Switch to a CPATax Tips Taxpayers may outsource their financial stress by a specific age. Find out when you should hire a tax preparer.
-
Three Critical Tax Changes Could Boost Your Paycheck in 2026Tax Tips The IRS predicts these tax breaks may change take-home pay in 2026. Will you get over $1,000 in tax savings?
