Don’t Forget Your Required Year-end IRA Distributions!

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Ira distributionTaxpayers 70 ½ and up must take their payouts from IRAs and company plans by year-end. Start with your December 31, 2010 IRA balances and divide each of them by a factor for your age (The age factors are printed in IRS Publication 590 which you can find at You can use a higher factor if you are more than ten years older than your spouse. The sum of these amounts can be taken from any IRA you choose. The process is similar for retirement plan payouts, but you must take the required amount from each plan.

Failing to do so can result in a 50 percent penalty on the amount that should have been distributed. The IRS can waive the penalty if the individual can establish that the shortfall was due to reasonable error and steps are being taken to remedy the failure to distribute.


Like any good CPA, I need to add a disclaimer: Unfortunately, it is impossible to offer comprehensive tax info over the internet, no matter how well researched or written. And remember, I love my readers but having me bookmarked on your computer doesn’t make you a client: before relying on any information given on this site, contact a tax professional to discuss your particular situation.