Due to COVID-19 the CARES Act is NOT requiring Traditional IRA 2020 Required Minimum Distributions (RMDs) for any IRA owner who is age 70Â½ before 1/1/2020. Once you reach age 70 1/2, the IRS requires that you withdraw a minimum amount each year from all your IRA and retirement plans (except Roth IRAs) and pay ordinary income on the taxable portion of the withdrawal. This amount is referred to as your Required Minimum Distribution (RMD). Your RMD amount is determined by applying a Life Expectancy Factor set by the IRS to your account balance at the end of the previous year. To estimate your RMD: Locate the IRA Required Minimum Distribution Worksheet on the IRS website; Find your age in the IRS Uniform Lifetime Table located in IRS Publication 550; Locate the corresponding Life Expectancy Factor; and Divide your retirement account balance as of December 31st of the prior year by your Life Expectancy Factor. If you have more than one retirement plan, you will need to estimate the RMD for each separately, although the total may be withdrawn from any one or more of the accounts. Please refer to IRS Publication 550 for more spousal and beneficiary considerations. Disclaimer: MEXEM does not provide tax guidance or advice and the above is provided for informational purposes only. We recommend that clients consult with a qualified tax advisor or refer to the IRS for any tax-related questions.
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