RMD compliance questions

Wrong. SEP-IRAs are treated the same as Traditional IRAs. You must begin taking the RMD in the year you turn age 70 1/2 or no later than April 1 of the year after age 70 1/2 year. It does not matter that you are still working.

You need to take RMD from your traditional IRA and your SEP. If the IRA is not a beneficiary IRA, compute the RMD for the IRA, Ditto for the SEP. You can take the the combined RMD anyway you want between those accounts. Also note that SIMPLE IRAs and SARSEP IRAs are treated the same way.

No. It only counts against a 403(b) RMD if required. Note that the exception from age 70 1/2 distributions from defined contribution plans for those still working only exists if the plan does not have a requirement for employee age 70 1/2 required distributions.

Trustees sent Form 5498 to the IRS and you around May of 2018. It has your account balance at year-end 2017 and a box that should have been checked that says you have a required distribution from your IRAs. I can't answer your TT question.

You have to take the IRA RMD from an IRA. The distribution from a 403b account doesn't count towards your IRA RMD. From:

"Can an account owner just take a RMD from one account instead of separately from each account?

An IRA owner must calculate the RMD separately for each IRA that he or she owns, but can withdraw the total amount from one or more of the IRAs. Similarly, a 403(b) contract owner must calculate the RMD separately for each 403(b) contract that he or she owns, but can take the total amount from one or more of the 403(b) contracts.

However, RMDs required from other types of retirement plans, such as

401(k) and 457(b) plans have to be taken separately from each of those plan accounts."

Your IRA custodian should have sent you a form 5498 by January 31, 2018 that showed the Fair Market Value of your account on December 31, 2017. The IRS also gets a copy. They also get copies of the 1099-Rs showing the eventual distributions and their computers should have no trouble determining whether you took required distributions.

An RMD is just a retirement plan distribution and TT can treat it like any other distribution.

If you took your full RMD, you don't report what you did to the IRS (other than reporting the amount distributed from each account). You only have to report if you did not take the full RMD, because in that case you owe a penalty.

TurboTax will ask whether you took your full RMD. If you say no, it will ask the full RMD amount and how much you took. It uses that information to complete Form 5329 to either calculate the penalty or request a waiver of the penalty.

Bob Sandler

On 12/21/18 6:25 PM, BignTall wrote: [SNIP]

Be careful how you couch that term "IRA owner." You can not include a beneficiary IRA in your method. If you inherit an IRA from a non-spouse or you inherit an IRA from a spouse and name it as a beneficiary IRA, then you must take the RMD from that beneficiary IRA. The only exception is when you inherit multiple IRA accounts from the SAME DECEDENT. Then you may take the RMD from any of those same inherited IRAs.

I agree with you. The sentence you don't like is a direct quote from the IRS FAQ paragraph I quoted. The way the OP described his IRA made it seem (to me at least) that it wasn't a beneficiary IRA so I didn't see much need to go into the beneficiary IRA RMD rules.

Thanks Alan, Bign Tall, and Bob Sandler.

Sorry, but I just realized that I previously wrote a lot of WRONG/INCORRECT information. So, please allow me to try again.

As of 12/31/2017, I had:

1) A self-directed IRA worth $300,000. 2) An primary employer TDA (403b) worth $300,000. 3) An primary employer SEP IRA worth $375,000. 4) A part-time employer TDA (403b) worth $50,000.

I am still employed at both my primary employer and my part-time employer.

I previously INCORRECTLY wrote that I had WITHDRAWN $42,000 from my primary employer TDA(403b). The CORRECT information is that I BORROWED $42,000 from that TDA(403b) in 2018.

But, in 2018, I did WITHDRAW (as a Distribution) $127,000 from my primary employer SEP IRA.

I now understand that an employer SEP Plan is actually a SEP (traditional) IRA.

So, does that $127,000 withdrawal/distribution from my primary employer SEP IRA mean that I already took more than the required amount of my RMD for

2018?

Thanks.

Well, maybe. An FAQ at irs.gov reads as follows:

IRAs 1 and 3 have their minimum distributions calculated, and the total RMD taken from either. Looks like you're OK there.

403(b)s 2 and 4 their RMDs calculated, and the total taken from either. I haven't checked whether either or both has no RMD because you are still working. If not, you haven't yet met that RMD requirement, but you have until April 1, 2019.

-- Arthur Rubin, AFSP, CRTP, Brea, CA

Google can be your friend if you evaluate the reliability of the sources it points you to. Googling things like 'sep ira rmd requirements' will point you towards a variety of references on the IRA website that appear to answer your questions.

Yes, the $127,000 distribution from the SEP more than meets any RMD for your IRAs. In a prior response I mentioned that an RMD would not be required from an employer 403(b) if you were still working for that employer BUT only if the plan did not require an RMD. I.e., some employer plans require an RMD upon reaching age 70 1/2 even if still employed.

You can limit the search to only the IRS website (for example) by including among the google search terms the phrase

site:irs.gov

Thanks BignTall and Stuart.

I did do a lot of Google searching before and after posting but I couldn't quite find the answers to my specific questions.

Stuart,

Nice trick about narrowing a Google search to a specific website! I never knew that was an option.

Thanks Alan. I really appreciate the information.