Required minimum distributions — Can I put it back??
I am 72 years old and one month. I must withdraw money from my IRA, because I turned 72. I do not understand why money I have saved from taxes is “no longer safe”. Can I withdraw the money-whatever the amount- and just roll it back into my IRA without having to pay taxes on the withdrawal? This RMD seems like filling out my tax forms will add an additional challenge I don’t want at my age. Is this the government taking advantage of us elders who are saving our money?
Terry Says
No. The government is playing by its own rules — rules that were set back when you opened your IRA. The government wants its tax money on your gains — and it doesn’t want to wait!
So you must take a prescribed RMD — required minimum withdrawal — every year. And pay taxes on that withdrawal.
When you take your RMD ask the IRA custodian to withhold 20% in income taxes, so you don’t get hit with a tax bill next year.
Next January they will send you a reminder (and report to the IRS) that you withdrew a certain amount, and taxes were withheld.
Yes, it will make your tax return a bit more compicated!
Once the money is OUT, you cannot put it back in — since you are no longer working and no longer have earned income. You can put the RMD in your savings or checking account and use it to supplement your Social Security.
