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Anyone agree with me that an end date for MRDs of 4/15, just like TIRA contributions would, in the end, save the IRS a lot of paperwork on 5329s and senior taxpayers a lot of anxiety.

If so, join me in suggesting it to your Congressperson.

Thanks

baumgrenze
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Anyone agree with me that an end date for MRDs of 4/15, just like TIRA contributions would, in the end, save the IRS a lot of paperwork on 5329s and senior taxpayers a lot of anxiety.

I'm not of an age to have to take MRDs, so haven't had to look at it.
But my understanding is that you already have all the information you need to take your MRD for 2014. That everything you need to know to calculate you have already (ie. balance as of 12/31/2013 and what your birth date is).
Even if we say that it takes a month for the end-of-year statement to get to you from your mutual fund company / brokerage, that's still 11 months to make the withdrawal.

If people can't get it together to make a withdrawal within ~11 months, why should I think they will be more successful if they have 15 months? And then there will be the additional paperwork because "was it a 2013 withdrawal or a 2014 one?")

I would be fine with it changing - but I'm just not expecting it would make much difference to the IRS (or to most people who are procrastinating on taking the distribution.)
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Anyone agree with me that an end date for MRDs of 4/15, just like TIRA contributions would, in the end, save the IRS a lot of paperwork on 5329s and senior taxpayers a lot of anxiety.

I hate to be the one to break the news, but seeking a waiver of the penalty is an aberration, not the norm. Most people don't find it a burden to take the distribution on time. And do you really think that these brain trusts who couldn't pull it together in 12 months will do it in 15 AND remember to indicate what year the distribution is for?

I put it in the "really bad idea" column. It would make far more sense just to do away with RMD's if all you're looking for is simplification. Of course, with that approach you run up against the policy issue of letting these accounts sit untaxed forever.

Phil
Rule Your Retirement Home Fool
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Wouldn't a change to 4/15 also cause a problem with the issuance and receipt of 1099-R(s) in a timely manner?

Although a 4/15 deadline would have helped me once upon a time that I didn't get a RMD completed on time for my father. 8^)
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Even if we say that it takes a month for the end-of-year statement to get to you from your mutual fund company / brokerage, that's still 11 months to make the withdrawal.

I just got that letter from my broker, where my IRA is held, in early February. But I could see it on-line even earlier, in case I really cared. I do not suppose the broker is required to have it earlier, but mine has it, so they might as well put it on their web site.
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My observation, why not apply the same standards to TIRA contributions and, for that matter, estimated tax payments. Make them all payable in the year in which they apply. Certainly everyone would need to plan ahead a bit more, but, hey, that's what is being advocated here.

"It would make far more sense just to do away with RMD's."

Good idea. The accounts would not sit untaxed forever. Death and taxes are a certainty. The heirs could be taxed.

Thanks

baumgrenze
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"It would make far more sense just to do away with RMD's."

Good idea. The accounts would not sit untaxed forever. Death and taxes are a certainty. The heirs could be taxed.


This heir is spending her inheritance very slowly, taking only the imposed RMDs on the inherited IRA. I wish the same to be around if we have any money left to leave to the kids.

IP
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My observation, why not apply the same standards to TIRA contributions and, for that matter, estimated tax payments. Make them all payable in the year in which they apply. Certainly everyone would need to plan ahead a bit more, but, hey, that's what is being advocated here.

This won't work because those who have irregular income flows or self-employment income don't know how much they can contribute or what their final estimated tax payment needs to be until after the end of the tax year.

Just live with the fact that you messed up and have a way to get relief from the consequences of your error.

Ira
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I concede. Everything has its reasons.

I do wish I wasn't required to withdraw more than I need for expenses.

I am thankful for access to the Taxpayer Advocate Service if it proves necessary.

To others reading this and my recent related thread, ask your trustee about an automated MRD program. I wish someone had promoted its utility to me earlier. Go with a date in late Nov/very early Dec (in case someone makes a mistake) and CYA.

I'm also thankful that my aging shoulder is on the mend.

Thanks again for hearing me out with grace and patience.

baumgrenze
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baumgrenze
I do wish I wasn't required to withdraw more than I need for expenses.

That's the price you pay for Uncle Sam allowing you to save tax deferred.

To others reading this and my recent related thread, ask your trustee about an automated MRD program. I wish someone had promoted its utility to me earlier. Go with a date in late Nov/very early Dec (in case someone makes a mistake) and CYA

Fidelity, for one, does this.

George
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I do wish I wasn't required to withdraw more than I need for expenses.

My dad had the same complaint. After I pointed out that the requirement to withdraw funds from the IRA and include them in taxable income wasn't a requirement to actually spend the funds, he stopped complaining.

These days, I take RMDs from the part of Dad's IRA that I inherited. They just get transferred to my taxable brokerage account, where they are invested like all other after-tax funds. Works for me.

Patzer
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