Remember the Rules for Account Owners and RMDs
An IRA owner must calculate the required minimum distribution (RMD) separately for each IRA that he or she owns, but can withdraw the total amount from one or more of the IRAs. This is among the reminders the IRS provides regarding the rules governing RMDs
If an account owner fails to withdraw an RMD, fails to withdraw the full amount of the RMD, or fails to withdraw the RMD by the applicable deadline, the amount not withdrawn is taxed at 50%. The account owner should file Form 5329
, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts
, with his or her federal tax return for the year in which the full amount of the RMD was not taken.
The penalty for not taking the full RMD may be waived if the account owner establishes that the shortfall in distributions was due to reasonable error and that reasonable steps are being taken to remedy the shortfall. In order to qualify for this relief, a plan participant must file Form 5329 and attach a letter of explanation.