April 1st is approaching quickly and you need to be prepared --not because it is April Fools Day, but because it is one of the important dates on everyone's financial calendar.
Why is April 1st important? If you turned 70 1/2 in 2008, you must take your first required minimum distribution (RMD) from your IRA by April 1, 2009. (You could have taken the distribution at any time in 2008 as well but there is a special set of rules for your very first distribution.) For your first distribution, you can wait until as late as April 1 of the year following the year you turned 70 1/2.
And, as loyal readers of this blog already know, required minimum distributions from IRAs are suspended entirely in 2009. That means that anyone who turned 70 1/2 in 2008 doesn't have to take their second IRA withdrawal until 2010.
There is one little "hitch" that people turning 70 1/2 in 2009 need to be aware of -- your first required minimum distribution must be taken by December 31, 2010. In other words, you don't get the extra 3 months delay that your friend who turned 70 1/2 in 2008 received.
Finally, everyone needs to be aware that your distributions are taxable in the year in which they are received. If you did turn 70 1/2 in 2008 and were required to take a distribution for 2008 but didn't make the withdrawal until sometime in 2009, the withdrawal would be counted as 2009 income.
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