Tuesday, August 04, 2009

Required Minimum Distribution Holiday in 2009

Required Minimum Distributions (RMD's) for retirement plans have been waived for 2009. Retirees with other means of support are able to forego the normally required distribution in 2009 thereby deferring taxable income to a later time. This may allow some to perhaps catch up some of the principal they have lost during the recession.
Some instances when a RMD should still be taken would include if a taxpayer would otherwise loose a tax deduction due to high medical expenses or charitable deductions that would be otherwise lost. Also if an individual only has social security income as their means of support, they might only want to take a distribution up until the taxable threashold of social security payments has been reached.