Pretax RMDs boost your adjusted gross income, which can cause higher Medicare Part B and Part D premiums, among other tax consequences, he said. Your RMD is based on your pre-tax retirement balance as of Dec. 31 from the previous year. For 2024, the calculation divides your 2023 pretax balance by an IRS life expectancy factor. The penalty falls to 10% if the RMD is "timely corrected within two years," according to the IRS. There's been a higher standard deduction since 2018, and only about 10% of taxpayers itemized tax breaks on 2021 returns, according to the most recent IRS filing data.

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Persons: Derek Williams, Pretax, CFP Michael Lofley, Lofley, There's Organizations: Veratis Advisors, CNBC, CFP, HBKS Locations: Cary , North Carolina, Stuart , Florida