- 1). Determine whether you are required to take a minimum required distribution. If you have a traditional IRA are at least 70 1/2 years old, or turn will 70 1/2 in the current calendar year, you are forced to take a required minimum distribution. If you are 70 but will not reach 70 1/2 until the next calendar year, or if you have a Roth IRA, you do not have to withdraw a minimum amount from your IRA and can skip to Step 5.
- 2). Add the value of all of your traditional IRA accounts at the end of the previous year together to calculate their total value. For example, if at the end of the year you had $40,000 in one traditional IRA and $35,000 in another, your total would be $75,000.
- 3). Look up your life expectancy using the appropriate IRS life expectancy table. Use Table 3 unless you inherited the IRA, in which case you would use Table 1, or unless your spouse is more than 10 years younger than you, in which case you would use Table 2. For example, if you were 80 and neither exception applied to you, your life expectancy equals 18.7 years.
- 4). Divide your traditional IRA's total value (Step 2) by your life expectancy (Step 3) to determine your required minimum distribution. Continuing the example, you would divide $75,000 by 18.7 to find you would need to withdraw $4,010.70. This is a minimum you must withdraw, but there is no limit on how much of your traditional IRA you can withdraw.
- 5). Contact your financial institution to request a distribution from your IRA. The forms you have to fill out differ at each financial institution. At the end of the year, you will receive a form 1099-R that will show how much you received and how much is taxable.
- 6). Report the total amount withdrawn from your IRAs, found in box 1 of your form 1099-R, on line 15a of your form 1040 tax return and report the total taxable amount, found in box 2a, on line 15b of your form 1040 tax return.
previous post
next post