Required IRA distributions

Taxes
1

My wife recently turned 73 and has 3 separate IRAs. Does she have to take an RMD from each of them or can she take 1 RMD from one of them to cover the entire amount of all 3.

2

One will do fine.

3

I’d be careful about not taking the mandatory RMD from each account, especially if they had different administrators. It might work if you have all your RMDs in one place where an administrator can coordinate the withdrawals.

4

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One RMD equivalent to the total across all three accounts will work and is iaw IRS directives. :+1:t2:

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5

I have more than one IRA, and calc the RMD’s for each one. But then I take the total RMD from the poorest performing acct.

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6

From the way this question is worded, I assume the 3 IRA accounts are not with one institution. To make this easier, I would recommend taking the 3 IRA accounts and rolling them over into 1 account at a single institution. I did this using Fidelity Investments. The process was extremely easy, and they handled everything. Fidelity also handles calculating the RMD and distributing the payments in the manner that I have chosen.

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7

I agree. If you take one RMD for all three, the other two administrators may hound you for months about WHY you have not yet withdrew your RMD for that account, even though the IRS says you are good to go. Also, if you add the 3 accounts wrong by 1 cent,or round off incorrectly by 1 cent, you could be in tax trouble. If you insist on taking one, then you should add a few extra dollars to make sure you take out enough.

8

Experience here is I did not get any hounding, and was lucky to get some to specify how much it was.

I leave the difficult one (USAA life annuity) and use one that is easier to get along with Schwab. Have now emptied 2 or 3 of the others.

Now pay attention here old goats! If you don’t need some or all of that RMD this year, you can UN-TAX it! That is done with a Qualified Charitable Distribution. If you are giving to such charities, this is a much better way to do it. Just go learn the Rulez and follow them. You can give away up to 100k or so in a year!

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9

Yes, Qualified Charitable Distributions are a good way to avoid some of the income tax on a regular IRA or 401(k). BUT you have to make sure that your planned charity is truly QUALIFIED by the IRS. Many 401(c) charities are NOT qualified to receive QCD;s. This includes local churches that pass part of their received donations on to another charity (as many Christian churches do). The main church administration body may be qualified if is uses all its donations in-house. I tried to donate my QCD to a local church-sponsored children’s orphanage, a 401(c) charity. But then after donating, found that it was not qualified to receive QCDs because it required the children under its care to donate money to the church. In other words, they used donated money to donate to a second charity, which disqualified this charity from receiving QCD donations.

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10

My understanding is that you can’t do a QCD from a 401k unless you roll the funds to an IRA first?

11

Yes, almost anything you do with a 401(k) has first to be moved to a taxable Rollover IRA. then from there you can convert to a Roth IRA, or do a QCD, or withdraw some money and pay the tax. For my QCD, I withdraw my RMD from a Rollover taxable IRA and donated it to a children’s home. But I later had to change it to a taxable donation because that charity told me that even though it was a 401(c) charitable organization, it was not “qualified” to receive QCDs. The lesson is to check with the charity to see if it is qualified before you do the QCD.

12

I’ll add, I don’t think Roth conversions satisfy the RMD either. It would be a nice feature if so. Makes me plan to have a glidepath to having mostly Roth holdings well before RMDs are set to go.

13

To do a QCD;

  • The IRA owner must be at least age 70-1/2.

  • QCDs can only be done from a TIRA.

  • QCDs can be done from an inherited TIRA.

  • QCDs must be completed by December 31,

  • The maximum QCD amount for 2024 is $105,000.

  • QCD $ may be considered RMD $. In an RMD year the first $ distributed from a TIRA go toward stisfying the RMD.

  • QCDs are not reported on 1040 Schedule A.

  • The QCD check must come directly from your TIRA payable to the qualified charity.

14

It should be noted that the QCD check can be mailed to the IRA owner/donor, but the QCD check must be made payable to the charity and delivered to the charity and cashed by the charity.