Reporting RMD on federal tax form

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Topic Author
Namashkar
Posts: 211
Joined: Sun Sep 08, 2013 11:43 am

Reporting RMD on federal tax form

Post by Namashkar »

I will be withdrawing RMD the first time in 2022. I was wondering how to report it. I have both deductible and non-deductible contributions in my tax deferred account. Would I be withdrawing both on a pro-rata basis as I do when I convert to Roth? Would I use the form 8606 for reporting withdrawal of non-deductible contributions?

Any helpful information is appreciated.

Regards,
Alan S.
Posts: 12669
Joined: Mon May 16, 2011 6:07 pm
Location: Prescott, AZ

Re: Reporting RMD on federal tax form

Post by Alan S. »

Namashkar wrote: Tue Nov 30, 2021 3:48 pm I will be withdrawing RMD the first time in 2022. I was wondering how to report it. I have both deductible and non-deductible contributions in my tax deferred account. Would I be withdrawing both on a pro-rata basis as I do when I convert to Roth? Would I use the form 8606 for reporting withdrawal of non-deductible contributions?

Any helpful information is appreciated.

Regards,
Yes, you would use Form 8606 in the same manner as a Roth conversion, except ignore lines that deal with conversions specifically, and do not complete Part II. Form 8606 will calculate the taxable portion of your RMD and show how much IRA basis is left on line 14 to carry forward to the following year. You cannot avoid pro rating your RMDs for the rest of your life until you donated your entire pre tax IRA balance as QCDs over the years.

The reporting of RMDs on Form 1040 is done like any other non RMD IRA distribution. Gross distribution on line 4a and taxable portion on 4b.

You might also have non IRA Plans with RMDs. If you do, some exceptions may apply to the above. If you have after tax amounts in a 401k, you might want to do a split direct rollover (pre tax to TIRA and after tax to Roth IRA) before year end.

Finally, if you turn 72 in 2022, you have a one time option to postpone all or part of your 2022 RMD to as late as 4/1/2023. If you defer the entire 2022 RMD to 2023, you will then have 2 taxable RMDs in 2023. But if your taxable income will otherwise be much higher in 2022, you could save by deferring to 2023.
Topic Author
Namashkar
Posts: 211
Joined: Sun Sep 08, 2013 11:43 am

Re: Reporting RMD on federal tax form

Post by Namashkar »

Alan S. wrote: Tue Nov 30, 2021 4:45 pm
Namashkar wrote: Tue Nov 30, 2021 3:48 pm I will be withdrawing RMD the first time in 2022. I was wondering how to report it. I have both deductible and non-deductible contributions in my tax deferred account. Would I be withdrawing both on a pro-rata basis as I do when I convert to Roth? Would I use the form 8606 for reporting withdrawal of non-deductible contributions?

Any helpful information is appreciated.

Regards,
Yes, you would use Form 8606 in the same manner as a Roth conversion, except ignore lines that deal with conversions specifically, and do not complete Part II. Form 8606 will calculate the taxable portion of your RMD and show how much IRA basis is left on line 14 to carry forward to the following year. You cannot avoid pro rating your RMDs for the rest of your life until you donated your entire pre tax IRA balance as QCDs over the years.

The reporting of RMDs on Form 1040 is done like any other non RMD IRA distribution. Gross distribution on line 4a and taxable portion on 4b.

You might also have non IRA Plans with RMDs. If you do, some exceptions may apply to the above. If you have after tax amounts in a 401k, you might want to do a split direct rollover (pre tax to TIRA and after tax to Roth IRA) before year end.

Finally, if you turn 72 in 2022, you have a one time option to postpone all or part of your 2022 RMD to as late as 4/1/2023. If you defer the entire 2022 RMD to 2023, you will then have 2 taxable RMDs in 2023. But if your taxable income will otherwise be much higher in 2022, you could save by deferring to 2023.
Thanks a lot Alan S for your quick and detailed response. I love this forum and its members. :oops: :oops: :oops: :oops: :happy :happy
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