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JANUARY 2016Nebraska Public Employees Retirement SystemsPROVIDING INFORMATION TO RETIREES OF NEBRASKA STATE AND COUNTY RETIREMENT PLANS2016 Required ANNUITY PAYMENT Minimum SCHEDULE Distributions Each

How to fill out required minimum distributions

How to fill out required minimum distributions:

1. Gather necessary information: Before filling out required minimum distributions (RMDs), you need to gather important information such as your retirement account balance, previous year’s December 31st fair market value, and the appropriate life expectancy factor.
2. Determine your RMD amount: Next, you need to calculate the amount of your RMD. This can be done by dividing the retirement account balance by the life expectancy factor, which is obtained from the IRS Uniform Lifetime Table or other relevant IRS tables.
3. Choose the distribution method: After determining the RMD amount, you can decide how you want to receive the distribution. You can either take the full amount in a lump sum or opt for periodic distributions throughout the year. Make sure to consider any tax implications or financial goals when making this decision.
4. Fill out the appropriate tax forms: When it comes to reporting your RMDs to the IRS, you will need to fill out certain tax forms. Most commonly, you will use Form 1099-R to report distributions from retirement accounts. Consult with a tax professional or refer to the IRS guidelines for detailed instructions on filling out these forms accurately.
5. Timely submission: It is crucial to ensure that your RMDs are submitted on time to avoid potential penalties. The deadline for most individuals is December 31st of each year, although there is a one-time exception for the initial RMD which can be taken until April 1st of the following year after turning 72 (or 70 ½ for those who reached the age by January 1, 2020). Keep track of the submission deadline and make sure to comply with the IRS regulations.

Who needs required minimum distributions?

1. Individuals with retirement accounts: Required minimum distributions (RMDs) are applicable to individuals with qualified retirement accounts, including traditional IRAs, Roth 401(k)s, 403(b)s, and other similar retirement plans. RMD rules ensure that individuals start withdrawing a certain amount from these accounts after reaching a certain age to prevent potential tax avoidance strategies.
2. Retirement account owners who have reached the age of 72 (or 70 ½ for those who reached the age by January 1, 2020): The age at which RMDs become mandatory depends on the type of retirement account you have and your birthdate. If you turned 72 (or 70 ½) before the specified date, you are required to take RMDs from your eligible retirement accounts.
3. Beneficiaries of inherited retirement accounts: In addition to retirement account owners, beneficiaries of inherited retirement accounts also need to be aware of RMD rules. The rules for beneficiaries differ based on their relationship to the original account owner, and it is essential for these individuals to understand the specific requirements and obligations related to RMDs from inherited accounts.

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What is required minimum distributions?

Required minimum distributions (RMDs) are the minimum amount that must be withdrawn from a retirement account each year once the account holder reaches a certain age.

Who is required to file required minimum distributions?

Individuals who have a traditional IRA, 401(k), or other type of retirement account are required to file required minimum distributions once they reach a certain age, typically starting at age 72.

How to fill out required minimum distributions?

To fill out required minimum distributions, individuals must calculate the amount of their RMD based on their account balance and life expectancy, and then submit the necessary paperwork to their retirement account custodian.

What is the purpose of required minimum distributions?

The purpose of required minimum distributions is to ensure that individuals withdraw a minimum amount from their retirement accounts each year to prevent them from delaying paying taxes on those funds indefinitely.

What information must be reported on required minimum distributions?

Required minimum distributions must report the amount withdrawn from the retirement account, the account balance, the individual's age, and any taxes withheld.