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Celebrating a birthday is fun. It also can mean tax tasks if you must take a required minimum distribution, or RMD, from a tax-deferred retirement account.
Happy belated birthday wishes to all who celebrated their 73rd birthday’s last year.
Now, another important date related to that septuagenarian milestone is almost here.
If you delayed taking the required minimum distribution (RMD) from your tax-deferred retirement plan last year, you must do so by April 1.
Miss it and you’ll owe Uncle Sam more money than just the tax due on your mandated nest egg withdrawal amount.
No fooling.
Ending tax deferral days: Tax-deferred accounts are one type of retirement vehicles available under the Internal Revenue Code. These plans allow taxpayers, and in some cases their employers, to contribute pre-tax money that, along with the associated earnings, are not taxed until withdrawn, generally during the account owner’s retirement years.
Accounts that are subject to RMDs include traditional IRAs, regular 401(k)s offered by employers, workplace 403(b) or 457(b) plans, and traditional SEP or SIMPLE IRA accounts.
But Uncle Sam won’t wait forever for the tax payments on these funds.
The RMD rule sets a specific amount, considering the savings plan amount(s) and owner’s life expectancy, that must be withdrawn once affected savers reach their triggering (in more ways than one!) birthday.
A quick planning note for younger savers. The two Setting Every Community Up for Retirement Enhancement (SECURE) Acts tweaked RMD birthdays. The current age 73, set in 2023, goes to age 75 in 2033.
The mechanism, however, remains the same.
The RMD amount must be taken by Dec. 31 of the year you reach the mandated birthday withdrawal year. But you do get a bit of a break that first year.
In that initial RMD birthday year, account owners can delay their first retirement account distribution until April 1 of the following year.
So, birthday number 73 celebrants in 2025 have until this quickly approaching April 1 — yes, that’s this Wednesday — to take their first RMD. Then in subsequent years, they must take their RMDs by Dec. 31.
That end-of-year due date means that if you pushed your first RMD to this April, you’ll take a second one, for the current 2026 tax year, by the end of this year.
Calculating your RMD: Annual RMD amounts are based on your tax-deferred account values at the end of the previous year and your age.
The IRS provides tables that use life expectancy data to help you calculate your RMD each year.
So, find your tax-deferred retirement account’s year-end statement. This will show you the dollar amount with which you must work. Take that Dec. 31 value and divide it by the years shown for your age in the appropriate IRS table.
Here’s a simplified example of a retirement saver we’ll call Janet, who turned 73 in June 2025:
- Janet’s traditional IRA was worth $100,000 at the end of last year.
- She uses the IRS’ Uniform Lifetime table, which shows a life-expectancy distribution period for 73-year-olds of 26.5 years.
- Janet divides her $100,000 account value by 26.5 to determine that she must take $3,774 (rounded up) from her IRA.
That, as the RMD name indicates, is the minimum Janet must take out of her IRA. She can take more if she needs or wishes.
Type of tax: Note, too, that the tax on RMDs is at your ordinary income tax rate, which now tops out at 37 percent.
Some people mistakenly think their RMDs are subject to the generally lower capital gains tax rates (they range from 0 percent to 15 percent to 20 percent, depending on income) because their nest eggs are in an investment vehicle, rather than a basic savings account.
Sorry, that’s a wrong, and costly, assumption. Ordinary income tax rates apply to RMDs.
Different account owners, multiple tables: In the previous example, traditional IRA owner Janet used the Uniform Lifetime, or Table III, that’s found in Appendix B of IRS Publication 590-B. It is the RMD table that is used by most older retirement savers.
Table III is for tax-deferred retirement account owners who are unmarried; married and whose spouses aren’t more than 10 years younger; or married and whose spouses aren’t the sole beneficiaries of their IRAs.
But there are many different retirement savers with different circumstances. So the IRS has two other life expectancy tables.
If your situation doesn’t fall into the Uniform Lifetime table parameters, check out the Which Table Do You Use? section of Publication 590-B. It will help you decide which of the three tables to use, and has links to those tables.
Multiple accounts, more calculations: The RMD applies to all your tax-deferred retirement plans. So if you have multiple such accounts, you’ll have to make multiple RMD calculations.
You must figure the RMD separately for each traditional IRA you own. You can, however, withdraw the total amount due from one or more of the IRAs.
Similarly, if you have more than one 403(b), you must calculate the RMD separately for each. Here you also can take the total amount from one or more of the 403(b) plans.
However, RMDs required from other types of retirement plans, such as 401(k) and 457(b) plans, must be taken separately from each of those plan accounts.
And note that you can delay taking RMDs past age 73, but only from your current employer’s retirement plan if you’re still working. You must, however, still take any IRA-related RMD.
In most cases, trustees of retirement plans will alert affected account owners of the deadline. Most also will tell you how much you must take to comply with RMD rules. They also can help you set up automatic RMDs so you don’t miss the annual deadline.
More is allowed (and taxed): While Janet, as mentioned in the earlier example, has to take $3,774 from her traditional IRA, she’s free to take more.
That’s fine with the IRS. It would love to get it’s piece of even more of Janet’s (and everyone’s) tax-deferred savings than what it collects on minimum amounts taken out by the annual RMD deadline.
These more-than-minimum amounts, however, won’t change your annual RMD amounts.
You don’t get any credit for the additional RMD amount you take when determining required withdrawals for future years. Neither can you carry the excess RMD forward to a future tax year.
But taking out more should reduce, at least somewhat, the account’s balance and help reduce future RMD amounts.
Withdraw RMD or pay a penalty: If you reach your RMD age, but don’t need your retirement plan money to cover current living expenses, you might be tempted to ignore the withdrawal mandate. Don’t.
Tax law says you’ll pay a penalty for not taking an RMD.
The good news is that the SECURE 2.0 Act, signed into law on Dec. 29, 2022, cut the missed RMD penalty in half. The bad news is that it’s still pretty steep.
Previously, you faced a 50 percent excise tax on the RMD amount you were supposed to take. It’s now 25 percent.
That penalty tax could be cut to 10 percent if you correct your missed distribution within two years. Do that by filing IRS Form 5329, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts.
The penalty may be waived if you can show that the RMD shortfall was because of reasonable error and that you are taking realistic steps to remedy the shortfall. In this case, file Form 5329 and attach a letter of explanation. The form’s instructions (or your tax advisor) have more on how to handle missed RMDs.
Donate your RMD instead: There is another option if you don’t need your RMD money. You can give it to an IRS-approved charity. This will ensure you meet your RMD, but you won’t owe tax on the donated amount.
Just make sure you follow the donation rules. You can’t take the RMD yourself, then write a check in that amount to the nonprofit. Since you took the money, it’s still taxable income on your tax return.
Instead, work with your retirement account’s manager and give the amount as a qualified charitable distribution, or QCD. Charities also are well-aware of this option and your favorite also probably has guidelines to help you make a QCD.
With this philanthropic option, your RMD amount is transferred per your instructions directly to your IRS-authorized charity. In some cases, you are sent a check from your savings with the RMD amount made payable to your chosen charity so that you can forward the gift yourself.
The bottom line is that you don’t ever get access to the money. While the RMD is taken from your tax-deferred retirement plan and counts as you meeting your distribution obligation, the dollars don’t count as taxable income to you.
These donations can be more than your RMD. In 2026, you can make a QCD of up to $111,000. The special retirement gift limit is adjusted annually for inflation.
You also can start donating from your RMD-affected savings before you are required to take out the money. Account owners age 70½ can make QCDs. The gifts can help reduce your taxable retirement account balances, meaning you shouldn’t be required in a few years to take out as much.
As for those now facing RMDs, if you’ve postponed your RMD this close to the April 1 due date, you might not have time to make a QCD now. But it’s something to think about as your 2026 tax year required withdrawal deadline of Dec. 31 nears.
Other RMD tax and financial planning: Finally, remember how relieved you were when you found out last year that you could push your first RMD until this April? It really helped with your cashflow, and kept your 2024 tax liability from escalating.
But now, as noted earlier, you’re going to face double RMDs and associated taxes.
Your 2025 RMD you’re taking on April 1 is income that’s taxable for the 2026 tax year. So is the 2026 RMD you must take by Dec. 31.
So, at tax filing time next year, you’ll owe tax on two RMDs (if you didn’t take the QCD route) instead of the usual one per year. Be sure to factor this double RMD tally into your 2026 tax bill planning.
You might, for example, want to adjusting your estimated tax amounts for this year to cover the added taxable distributions.
RMD tax planning also includes, for most taxpayers, state taxes. Your RMD could push you into a higher federal and, if your state has a progressive tax system, state tax bracket.
RMD income also could affect your federal retirement benefits. More income from your retirement plan could mean a larger portion of your Social Security benefits are subject to federal taxation.
Higher-income Medicare enrollees also could see their Part B (doctors’ visits and outpatient tests) and Part D (prescription drugs) premiums hiked due to income-related monthly adjustment amount, or IRMAA.
IRMAA is determined by income from your income tax returns two years prior. This means that your 2025 income tax return will be used to determine your 2027 IRMAA exposure. So, your RMD amount this year also could cost you in two years. Potential IRMAA also could be another reason to consider a QCD, which will keep your RMD out of your taxable income tally.
The Social Security Administration’s Form SSA-44 has more on how much added income will affect your Part B and D premiums, and possible ways to reduce them.
The IRS has some RMD frequently asked questions to give you an idea of things to consider.
Your first move, though, is to know when you must take your RMD, and meet that deadline. Especially if that deadline is this week, on April 1.
