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Not at that point in my life yet, but, curious to know if taking RMD in an annual lump sum requires a form 4972 and if it subjects the retiree to any different tax scheme?
Taking a once-a-year (annual) RMD is not the same as a "lump sum" distribution. "Lump sum" means the entire account balance all at once.
Re tax, RMDs are taxed as ordinary income; same as interest, wages, pension, etc (Not as capital gains) on Line 4a & 4b on IRS 1040
Not at that point in my life yet, but, curious to know if taking RMD in an annual lump sum requires a form 4972 and if it subjects the retiree to any different tax scheme?
No. All distributions are reported on a 1099R and are taxable. The rules for estimated tax payments will apply.
Form 4972 applies to complete balance withdrawals from employer qualified plans. For example, when my wife left an employer she was vested in a defined benefit pension plan. Instead she took a lump sum and rolled it into an IRA. Had she kept the money, she would have to file a 4972.
My wife and I take our RMDs in one lump sum (actually two lump sums, hers and mine), usually in January. We figure that we might as well have the use of the money throughout the year. We have our accounts with Schwab, and they make it simple and easy.
I don't think I would want that, prefer to get it monthly. Schwab has a pretty good system?
Anyone here begin taking distributions early? Was there a significant tax benefit to taking them early and spreading out the distribution? To avoid the so called "tax torpedo" by delaying until 70 1/2 for RMDs?
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