Dear Dr. Don,
I was the beneficiary of a small individual retirement account from my dad, who died in 2007 at age 88. At the time, I was 56, and the financial planner who had the beneficiary gave me a RMD in 2007 and 2008.
In early 2009, I assigned the IRA to the financial planner who has my other accounts. I was told I was not required to take a distribution in 2009 as a one-time consideration by the Internal Revenue Service.
Now, in 2010, the first time I need to make the RMD with the new financial firm, the firm says an accountant should calculate the RMD for me. The person I use to file my taxes each year says they rely on the financial firm that holds the account to do this. What a Catch-22!
In your experience, who usually calculates this? Is it something I can do myself? If so, can you point me to where to get instruction?
-- Pam Payment
Dear Pam,
Regardless of who calculates the payment, in the end it's the retirement plan account owner that is ultimately responsible for calculating the amount of the required minimum distribution.
Your financial planning firm may not be providing tax advice and as such won't calculate your RMD. The accounting firm should be able to handle this responsibility. If it can't, it's time to find a new accountant.
Bankrate has a RMD calculator for beneficiaries that will help you calculate your required minimum distribution. Still, your accountant should provide the last word on the RMD.
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