What to do if you miss taking an RMD

People don’t often think of the IRS as their friend. But there is at least one taxpayer-friendly thing the IRS is known for: its process for people who miss taking their required minimum distributions, or RMDs, from a retirement account. If you don’t go about it the right way, though, it can cost you 50% of the missed amount plus interest as penalty. If you follow the steps below, you can possibly get the penalty waived. The IRS has a guidance that states that the penalty may be waived if the RMD was missed because of “reasonable circumstances.” It doesn’t specify what qualifies as reasonable circumstances, but if this is your first time missing an RMD (even one that covers multiple years) and it was an honest mistake, the chances are good that the IRS will grant a waiver if you correct it right away. Here’s how to ask for relief from the penalty for missing RMDs. The first step is to withdraw the missed amount. The IRS won’t even consider granting relief from the penalty until you’ve taken care of that. Then, you need to report the mistake to the IRS. You do not have to amend previous income