Who is Not Required to Take a 2017 RMD by December 31?

While most solo 401k owners who are 70 ½ or older will need to take a 2017 required minimum distribution (RMD) by December 31, 2017. However, that deadline does not apply to all solo 401k owners. Solo 401k owners who are age 70 ½ or over are not required to be take an RMD from their solo 401k by the upcoming December 31 deadline if you just reached 70 1/2 in 2017.  Generally, when you reached age 70 ½ you must take an RMD. However, for the first year you catch a break. You do not have to take your 2017 RMD until your Required Beginning Date (RBD) which is April 1, 2018. This is only a one-time exception. All future Solo 401k RMDs must be taken by December 31. However, there is a downside to waiting until 2018 to take your 2017 RMD. You will need to take your RMD for 2017 by April 1 and the 2018 RMD for your second distribution calendar year by December 31. That means two taxable distributions, which would need to be included in income so you won’t be able to spread your tax liability over 2017 and 2018 if you took your 2017 RMD in 2018.

 

About Mark Nolan

Each day I speak with energetic entrepreneurs looking to take the plunge into a new venture and small business owners eager to take control of their retirement savings. I am passionate about helping others find their financial independence. Having worked for over 20 years with some of the top retirement account custodian and insurance companies I have a deep and extensive knowledge of the complexities of self-directed 401ks and IRAs as well as retirement plan regulations. Learn more about Mark Nolan and My Solo 401k Financial >>

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