Summary
When you realize you forgot to take your required minimum distribution (RMD), act quickly to minimize tax pain. The IRS generally imposes a 25% penalty on amounts you should’ve withdrawn but didn’t. To reduce that hit, take the missed distribution as soon as possible and file IRS Form 5329 with your tax return. Correcting the mistake within two years can cut the penalty to 10%, and you can request a waiver if a reasonable error caused the miss. Don’t panic — but don’t delay: correcting the oversight promptly limits costs and keeps you compliant.
The Motley Fool
