How do you know if your retirement payments is an RMD or not? On my 1099-R Box 7. it shows 7-Normal Distribution. IRA/SEP/SIMPLE is blank.

Forum|Forum|1 year ago
August 13, 2024
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Best answer by VolvoGirl

Say all of it is the RMD. If you are 72 it will ask you if it is the RMD. Say yes. Anything your pension pays you is considered to be the RMD. Traditional pensions automatically fulfill the rules of an RMD.

One reason it might ask is to determine if your 1099R is eligible to roll over to another qualified retirement account. Which a RMD is not eligible.

VolvoGirlAnswer

Employee

One reason it might ask is to determine if your 1099R is eligible to roll over to another qualified retirement account. Which a RMD is not eligible.

Opus 17

Employee

RMD is not a special transaction. It is the minimum amount you must withdraw over the year, based on your age and the size of the account. Suppose you have a 401k and your RMD is $5000. That could be satisfied by withdrawing $5000 all at once on December 29, but it would also be satisfied if you had withdrawn $500 per month for living expenses. If you need to know what your RMD is, there are charts and online tools to calculate it. (Also note that for a defined pension, the entire payment is considered an RMD.)

The only reason the RMD question is important, is that you can't rollover money to other retirement accounts until after you meet your RMD for the year. If you aren't doing those things, then it does not change or hurt your tax return to say that all your 1099-R is an RMD.

(Again, suppose your RMD from your IRA is $5000, and you also want to convert some of your IRA to a Roth IRA. You can only do the Roth conversion after you have withdrawn at least $5000 and paid the tax on it.)