Tax season is full of deadlines, and now the Internal Revenue Service (IRS) is reminding retired taxpayers of another upcoming one: April 1st.
The agency explained that this is the last day for retirees — especially those who turned 72 during 2022 — to begin receiving payments or required minimum distributions from their 401(k), individual retirement accounts (IRAs) or other workplace retirement programs .
What are the minimum distributions required?
For retirees with certain retirement programs, this money cannot sit in these accounts indefinitely. This is where required minimum distributions (RMDs) come in.
RMDs are withdrawals that retirees must make from their retirement plans on an annual basis. While retirees are free to draw more than the minimum requirements, these withdrawals must be included in their taxable income when they file their taxes for the year.
The exact amount of the RMDs will vary from person to person. However, the IRS has several resources available on their website to help taxpayers determine how much to withdraw each year.
Which accounts fall under this rule?
So which accounts are subject to the RMD rules? Below is the full list:
The IRS explained that while these payments typically must be made before the end of the year, for those who turned 72 in 2022, the final deadline is April 1, 2023. But those who take their first payment before April 1 must then make their second withdrawal no later than 31 December 2023.
However, these rules need to be changed slightly by the end of this year. When it comes time to file 2023 taxes, retirees will be able to wait until they turn 73 to start taking RMDs.
More tax resources for seniors
Throughout tax season, the IRS has shared resources that seniors can use as they prepare to file their taxes.
For older taxpayers who have questions about their pension schemes or pensions, they can contact the Tax Advisory Service for the Elderly. This program can help guide taxpayers through the filing process and clear up any confusion about the filing process.
The IRS’s free file tool is specifically for those who earned less than $73,000 in 2022, and it allows taxpayers to file their federal returns — and some state returns — for free.