Thursday, December 31, 2015
If a person is over 70 ½ years old and either owns or inherited an individual retirement account (IRA) they must make a required minimum distribution (RMD) by tonight, December 31, 2015. Failure to make the RMD by the deadline can subject that person to a 50 percent excise tax on the amount that was supposed to be distributed by law. If a person misses the December 31 deadline they should notify the IRS by filling out a Form 5329 and requesting a waiver on the penalty. This article discusses the reasons that could qualify a person for having the 50 percent penalty waived. There is also a waiver in existence for a person’s first RMD. A 50 percent excise tax penalty could harm a retiree’s financial situation so it is important for people to make sure that they make their required distributions on time.
See Sharon Epperson, Missed the IRA Distribution Deadline? Advice to Avoid Tax Penalty, NBC, December 31, 2015.