IRS Reminds 73-year-old Retirees to Begin Taking RMDs by April 1
Retirees who turned 73 years old in 2024 must start taking required minimum distributions (RMDs) from Individual Retirement Arrangements (IRAs), 401(k)s, and other workplace retirement plans by Tuesday, April 1, 2025, according to the IRS' latest reminder. This requirement applies to individuals born after December 31, 1950. The reminder was issued on March 13 in news release IR 2025-33.
Background. RMDs are mandatory withdrawals that must be taken from specific tax-favored retirement plans. These distributions are designed to avoid the indefinite tax deferral of retirement accounts. While RMDs are typically due by year-end, 73-year-olds taking distributions for the first time can delay the distribution until the April deadline. This leads to two distributions in 2025: one for 2024, due by April 1, 2025, and the other for 2025 due by December 31, 2025. Both distributions will be taxable in 2025.
Who is affected by RMD rules? RMD rules apply to owners of Simplified Employee Pension (SEP) and Savings Incentive Match Plan for Employees (SIMPLE) IRAs. They also apply to participants in 401(k), 403(b), and 457(b) plans. Roth IRAs are exempt from RMDs.
IRA trustees are required to inform account holders of RMD amounts or compute them. This amount will generally be reflected on Form 5498; the RMD amount for a 2024 distribution will appear on the 2023 Form 5498.
Is the April 1 deadline mandatory? The April 1 deadline is mandatory for most traditional IRA owners and retirement plan participants. However, some individuals may delay their RMDs until after retirement if their workplace plan allows it. This exception is not available to 5% of business owners in SEP and SIMPLE IRA plans.
Find out more. Please contact your Sisterson representative to find out more. Also available here is Publication 590 B, “Distributions from Individual Retirement Arrangements (IRAs),” which provides worksheets, examples, life expectancy tables, and additional information for use in determining an RMD.
