Required Minimum Distributions (RMDs)
Annual minimum distributions must first begin by the year that the taxpayer turns age 70½. If the taxpayer made nondeductible contributions in prior years, the preparer will need to use Form 8606, Nondeductible IRAs, to figure the percentage of the distribution that is nontaxable.
Generally, the taxpayer must begin receiving distributions by April 1 of the year following the year in which he reaches age 70½. The RMD for any year after the year in which the taxpayer turns 70½ must be made by December 31 of that later year. If distributions are less than the RMD for the year, the taxpayer may have to pay a 50% excise tax for that year on the amount not distributed as required. If the excess accumulation is due to reasonable error and the taxpayer is taking steps to remedy the insufficient distribution, then that taxpayer may request a waiver of the excise tax. Instructions for submitting this waiver request are in the instructions for Form 5329.