August 31st Deadline to Return Unwanted RMD Funds


One provision of the CARES Act was to waive this year’s requirement to take a Minimum Required Distribution (RMD) from an IRA, 401(k), or 403(b).   Many retirees depend on the money they receive from their retirement accounts, but for some, the requirement to have additional income can increase their tax liability for otherwise unnecessary withdrawals.   For those who have already taken an RMD for 2020 and do not need the money, you have until August 31st 2020 to return those funds with no penalty.  Retuning funds that are not wanted or needed can be a great option to reduce your taxable income and possibly reduce or even eliminate the need to pay Federal Tax on Social Security Benefits.  Not all plans are created equally and not everyone will benefit from this move. 

For questions about how to return the funds to your retirement account contact your plan administrator.  If you you’re not sure if this is a good option for you, contact us and we will be happy to discuss your individual situation.