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motoguzzibill
March 18, 2025
Question

What is tax on excessive accumulations in retirement account?How does this impact my taxes?

  • March 18, 2025
  • 1 reply
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    SabrinaD2
    March 18, 2025

    The tax on excessive accumulations in retirement accounts occurs when you fail to take your required minimum distributions (RMDs).

     

    If an account owner fails to withdraw the full amount of the RMD by the due date, the owner is subject to a 25% excise tax on the amount not withdrawn. The 25% excise tax rate is reduced to 10% if the error is corrected within two years.

     

    [Edited 03/19/2025|7:39 pm, EST] @motoguzzibill

     

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