Third, if you've already withdrawn the minimum required amount, either last year when you actually celebrated your 70½ birthday or earlier this year, you don't have to worry about the April 1 deadline. And you don't have to take another RMD for the 2011 tax year. You will, however, need to take your 2012 RMD amount by Dec. 31.
Finally, in 2011 you had the option of transferring your RMD amount directly to an eligible charity. If so, the charity received a nice gift (you could have transferred up to $100,000) and the money met the IRS withdrawal requirement but didn't count as taxable income to you. However, that's not an option for 2012 unless Congress makes a law change.
Other withdrawal rules
Even if you've been tapping retirement accounts before you became a septuagenarian, now you must keep a close eye on exactly how much you take out. All subsequent withdrawals must meet the IRS mandatory amounts.
You can always take out more than the required amount. But that won't affect distributions in future years. Say, for example, your required withdrawal this year is $1,500 but you take out $2,000. You can't carry that $500 over to count against the next required distribution. But, because you've reduced your IRA balance, your subsequent minimum distributions will likely be lowered.
Do you have multiple retirement accounts? Then you must figure the minimum withdrawal amount for each, but you don't necessarily have to raid them all. You can add the separate amounts and take the total from just one.
If you made any nondeductible contributions to your traditional IRA, make sure you have the paperwork to back that up. This is part of the reason that you need to file Form 8606, which tracks these amounts and establishes your cost basis in your account. Your nondeductible contributions are not taxed when you withdraw them. Rather, they are a return of your investment (i.e., your cost basis) in your IRA.
The IRS will let you take your required distribution in installments. Just make sure that these disbursements, be they monthly, quarterly or some other increment, total at least the yearly minimum amount you're obligated to withdraw.
Spending not required
While the IRS says you must take a specified amount of money out of your traditional IRA or other similar retirement plan, that doesn't mean you have to spend it.
The agency is interested only in collecting some of the deferred taxes on your account. That goal is accomplished as soon as you take the distribution.
If you don't need that money, or as much as you had to take out, to meet your living expenses, you can redeposit any or all of the distribution in another nonretirement savings account where it will keep earning interest for you. That's OK by the IRS, since it will get its share of these taxable earnings, too.
Bankrate's search pages can help you find the best rates on certificates of deposit or money market accounts that might be good places to stash any required IRA distributions you don't want to spend right away.