The IRS is reminding taxpayers about those required minimum distributions (RMD) that are due no later than April 1, 2017. Generally, individuals must start taking withdrawals from traditional, SEP and SIMPLE IRAs, and certain other qualified workplace retirement accounts, such as Sec. 401(k) plans, once they reach age 70-1/2. Individuals who turned age 70-1/2 during 2016 (those born after June 30, 1945 and before July 1, 1946) generally must begin receiving required minimum distributions by April 1, 2017.
The deadline only applies to the RMD for the first year. For all later years, the RMD must be made by December 31 of that year. A 50 percent tax normally applies to any required amounts not received by the deadline.
An April 15 deadline (April 18 this year) applies to contributions to IRAs that may be counted as made during the prior tax year. There’s no age limit for those contributing to a Roth IRA, but anyone who was at least age 70-1/2 at the end of 2016 is barred from making contributions to a traditional IRA for 2016 and subsequent years.