The RMD Workaround
In case you didn’t know, RMD stands for required minimum distribution, and they weren’t mandatory in 2020. However, those who are retired and take their required minimum distributions from their traditional IRA account this year could benefit from a “perk.”
Still, taking advantage of this tax perk is not as easy as you think. First of all, you’ll have to wait until December to benefit from it. So, can you enjoy your retirement without your required distributions? If yes, then ask your IRA sponsor to hold back some money for Uncle Sam.
Make sure the amount of money is enough to cover your estimated taxes on the RMD and other taxable income.