Regardless of your age, you'll need to file a 1040 form and show the amount of the IRA withdrawal. No matter your age, your earnings are taxable if you don't meet the five-year requirement. This is true even if your winnings are exempt from penalty. If you have multiple IRAs, you must calculate each account individually, but you can deduct the total amount in RMD from an IRA or combination of IRAs.
Every traditional IRA that becomes a Roth IRA has its own five-year retention period to avoid an early withdrawal penalty. You must calculate your RMD for each IRA separately, but you have the flexibility to deduct the full amount of your RMD from a single IRA or from a combination of IRAs. IRA rollovers are tax-free if you transfer money from one account to another or if you deposit the contribution you paid into an accumulated account within 60 days of the withdrawal. While traditional retirement fund withdrawal rules allow you to delay the first required minimum distribution of your IRA until April 1 of the following year, you may want to make your first distribution the first year you're eligible.
Although the IRA depositary or retirement plan administrator can calculate the RMD, the owner of the IRA account or retirement plan is ultimately responsible for calculating the amount of the RMD. If you convert a traditional IRA to a Roth IRA, you must pay taxes for the conversion, but then you won't have to pay taxes on that IRA again if you withdraw eligible funds, even if future tax rates are higher. You can transfer your retirement fund to an accrued IRA without incurring income taxes or early distribution penalties. An IRA owner must calculate the RMD separately for each IRA they own, but can withdraw the full amount of one or more of the IRAs.
The RMD rules also apply to traditional IRAs and IRA-based plans, such as SEP, SARSEP and SIMPLE IRA. Retirement plan participants and IRA owners, including owners of IRAs SEP and IRA SIMPLE, are responsible for promptly withdrawing the correct amount of RMD from their accounts each year and face severe penalties for not accepting RMDs. So how much do you need to withdraw from your IRA? The minimum withdrawal rules for an IRA are based on life expectancy.