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RMDs: When to Take Them and What to Do If You Miss the Deadline
Hey there, retirees! If you’re nearing—or already hit—the magic age of 73, chances are you’ve heard about Required Minimum Distributions (RMDs). These mandatory withdrawals from your retirement accounts can feel like another hoop to jump through, but don’t worry—I’m here to make it simple. And if you’re worried you missed your first one, don’t panic—you’ve got options. Let’s break it down!
When Do You Need to Take Your First RMD?
So, here’s the deal: when you turn 73, the IRS says it’s time to start withdrawing from those tax-deferred accounts—like IRAs and 401(k)s. You can take your first RMD anytime in the year you turn 73. For example, if you celebrate your 73rd birthday in 2025, you can take your RMD at any point during 2025.
But here’s the kicker: the IRS gives you a little breathing room for that first RMD. You have until April 1 of the following year to take it. This means if you turn 73 in 2025, you can wait until April 1, 2026, to complete your first withdrawal.
What Happens If You Wait Until April 1?
Here’s where some planning comes in. If you wait until April 1 to take your first RMD, you’ll also need to take your second RMD by December 31 of that same year. Yep, two RMDs in one year. While this is perfectly legal, it could bump you into a higher tax bracket depending on the amount and your other income. Taking your first RMD earlier in the year can help smooth out your taxes—something worth considering.
What If You Miss the Deadline?
Uh-oh—did you forget to take that first RMD by April 1? Don’t panic! You’re not doomed to face penalties just yet. The IRS understands that mistakes happen, and they offer a way to fix it. If you missed your first RMD deadline, you can request a waiver of the penalty by:
- Taking the missed RMD as soon as possible.
- Filing IRS Form 5329 (don’t worry, it’s easier than it sounds) and including a letter explaining why you missed the deadline. Common reasons, like illness or a misunderstanding of the rules, are usually considered valid.
The penalty for missing an RMD is 50% of the amount you failed to withdraw, but if you take action quickly and explain your situation, the IRS may waive it entirely.
How to Stay on Track
Here are some tips to avoid future headaches:
- Set a Reminder: Mark those key dates on your calendar—April 1 for the first RMD and December 31 for all the rest.
- Work with Your Financial Institution: Many retirement account custodians can calculate your RMD and even automate the withdrawals for you.
- Plan for Tax Implications: Talk to your financial advisor to strategize the timing of your withdrawals and manage your tax burden effectively.
Final Thoughts
Taking your first RMD might seem like a chore, but with a little planning (and some backup if you miss the deadline), it’s a manageable part of your retirement journey. Whether you decide to withdraw early in the year or use that April 1 extension, what matters most is staying informed and proactive.
You’ve worked hard to build your savings—now it’s time to make the most of them. Let me know if you’d like a deeper dive into any of these details!
IRS announces tax relief for taxpayers impacted by wildfires in California; various deadlines postponed to Oct. 15
If you’re a Los Angeles County taxpayer affected by the California wildfires, any qualified wildfire relief payments not covered by insurance or other reimbursements are excluded from your income. This includes payments from nonprofit organizations or non-governmental entities.
The IRS has extended the deadline for individuals and businesses in parts of California affected by wildfires and straight-line winds starting on Jan. 7, 2025. You now have until Oct. 15, 2025, to file federal tax returns and make tax payments.
Following FEMA’s disaster declaration, Los Angeles County residents and businesses qualify for tax relief. The IRS will postpone certain tax-filing and payment deadlines that fall on or after Jan. 7, 2025, and before Oct. 15, 2025, pushing them to Oct. 15, 2025.
This extension applies to individual income tax returns due on April 15, 2025, and estimated tax payments due on Jan. 15, April 15, June 16, and Sept. 15, 2025. Penalties on payroll and excise tax deposits due between Jan. 7, 2025, and Jan. 22, 2025, will be waived if deposits are made by Jan. 22, 2025.
The Oct. 15, 2025, deadline also applies to affected businesses for:
- Quarterly payroll and excise tax returns normally due on Jan. 31, April 30, and July 31, 2025.
- Calendar-year partnership and S corporation returns normally due on March 17, 2025.
- Calendar-year corporation and fiduciary returns and payments normally due on April 15, 2025.
- Calendar-year tax-exempt organization returns normally due on May 15, 2025.
If you receive a late filing or payment penalty notice from the IRS with an original due date within the postponement period, call the number on the notice to get the penalty waived. The IRS will automatically identify taxpayers in the disaster area and apply relief. If you’re outside the area but affected, call the IRS disaster hotline at 866-562-5227 to request tax relief.
Covered disaster area
The locality listed above is considered a covered disaster area for the purposes of Treas. Reg. §301.7508A-1(d)(2) and is entitled to the relief detailed below.
Affected taxpayers
Eligible taxpayers for extensions to file returns, pay taxes, and complete other time-sensitive acts include those listed in Treas. Reg. § 301.7508A-1(d)(1). This includes individuals living, and businesses headquartered in the disaster area. Taxpayers with records needed to meet a deadline but located in the disaster area are also eligible. Relief workers from recognized organizations assisting in the area and any individual visiting the area who was injured or killed by the disaster are also entitled to relief.
Under section 7508A, the IRS extends the deadline to file most tax returns to Oct. 15, 2025, for returns originally due between Jan. 7, 2025, and Oct. 15, 2025. This includes individual, corporate, estate, partnership, S corporation, trust, estate, gift, generation-skipping transfer, annual information, employment, and certain excise tax returns.
Estimated income tax payments due on or after Jan. 7, 2025, are postponed to Oct. 15, 2025. Penalties for failing to pay estimated taxes during this period will not apply if payments are made by Oct. 15, 2025.
The IRS also extends the deadline to perform other time-sensitive actions to Oct. 15, 2025, as described in Treas. Reg. § 301.7508A-1(c)(1) and Rev. Proc. 2018-58, for actions initially due between Jan. 7, 2025, and Oct. 15, 2025.
Form 5500 series returns due between Jan. 7, 2025, and Oct. 15, 2025, may be filed by Oct. 15, 2025, as detailed in section 8 of Rev. Proc. 2018-58. Section 17 of Rev. Proc. 2018-58 regarding like-kind exchanges of property applies even to some taxpayers who are not directly affected.
The extension does not apply to information returns in the W-2, 1094, 1095, 1097, 1098, or 1099 series; Forms 1042-S, 3921, 3922, or 8027; or to employment and excise tax deposits. However, penalties for tax deposits due between Jan. 7, 2025, and Jan. 22, 2025, will be waived if made by Jan. 22, 2025.
Casualty losses
Taxpayers in federally declared disaster areas can claim disaster-related casualty losses on their federal income tax return for the year of the event or the prior year. See Publication 547. Individuals may deduct personal property losses not covered by insurance. For details, see Form 4684, Casualties and Thefts, and its instructions. Taxpayers claiming a disaster loss should include FEMA disaster declaration number 4856-DR on any return.
Other relief
The IRS will waive fees for requests for copies of previously filed tax returns for taxpayers in affected areas. Include FEMA declaration number 4856-DR in bold at the top of Form 4506 or Form 4506-T.
Qualified wildfire relief payments are excluded from gross income in 2025 for unreimbursed losses, expenses, or damages. This includes funds for personal, family, living, funeral expenses, home repair, lost wages (except employer-paid amounts), personal injury, death, or emotional distress. See Publication 525 for more information.
Affected taxpayers with retirement plans or IRAs may qualify for special disaster distributions without the additional 10% early distribution tax, spreading the income over three years. See Form 8915-F and related FAQs under the SECURE 2.0 Act of 2022. They may also be eligible for hardship withdrawals, following specific plan or IRA rules.
The IRS may provide additional disaster relief in the future.
Affected taxpayers who are contacted by the IRS on a collection or examination matter should explain how the disaster impacts them so that the IRS can provide appropriate consideration to their case. Taxpayers may download forms and publications from the official IRS website, IRS.gov.
Reminder about Tax Return Preparation Options
Eligible individuals or families can receive complimentary assistance with tax return preparation at Volunteer Income Tax Assistance (VITA) or Tax Counseling for the Elderly (TCE) sites. To locate the nearest free tax help site, utilise the VITA Locator Tool or call 800-906-9887. Please note that typically, VITA sites are unable to assist with claiming disaster losses.
To find an AARP Tax-Aide site, use the AARP Site Locator Tool or call 888-227-7669.
Individuals or families with an adjusted gross income (AGI) of $84,000 or less in 2024 can use IRS Free File’s Guided Tax Software at no cost. Products are available in both English and Spanish.
Another Free File option is Free File Fillable Forms. These electronic federal tax forms are equivalent to a paper 1040 and are intended for taxpayers who are proficient in completing IRS tax forms. This option is available to everyone, regardless of income.
MilTax, a Department of Defense program, provides free return preparation software and electronic filing for federal tax returns and up to three state income tax returns. It is accessible to all military members and some veterans, without any income limitations.
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