Are RMDs required for an inherited IRA for non-spouse beneficiaries?

Thank you for the clear explanation! I didn't realize there was a difference depending on whether the original owner had already started RMDs. Do I use my own life expectancy to calculate the RMDs, or do I have to continue using my uncle's schedule? And does the 10-year rule mean I need to take out equal amounts each year, or just make sure it's all withdrawn by the end of 10 years?

For calculating the annual RMDs, you'll use what's called the "Single Life Expectancy Table" based on your age in the year after the year of death. Once you determine that first year's factor, you'll reduce it by 1 each subsequent year. Regarding the 10-year rule, you have flexibility in how much you withdraw each year as long as you take at least the minimum required distribution annually. You don't need to take equal amounts - you could take just the RMDs for 9 years and then withdraw the remainder in year 10, or any other pattern that satisfies both the annual RMD requirement and the complete distribution by the end of year 10. Many people consider their tax situation each year to determine the most tax-efficient withdrawal strategy.

Does this taxr.ai thing actually connect with your financial institutions directly? I've got an inherited IRA situation too but with Vanguard and they're being kinda useless about explaining what I need to do.

I'm a bit skeptical about using some random online tool for something this important. How do you know it's giving accurate advice? Did you double-check with an actual financial advisor?

It doesn't connect directly with financial institutions - you upload your statements and documents, and it analyzes those. What I did was take their recommended distribution plan to Fidelity where my inherited IRA is held, and their retirement specialist confirmed it was correct. They were actually impressed with how detailed the plan was. I totally understand the skepticism. I actually did consult with a financial advisor afterward, and he confirmed everything taxr.ai recommended was correct. He mentioned that the SECURE Act changed things significantly, and a lot of advisors are still catching up with all the nuances, especially for cases where the original owner had already started RMDs.

How does this Claimyr thing work? Do they just call the IRS for you or what? Seems weird that you'd need a service just to call a government agency...

Yeah right, there's no way anyone's getting through to the IRS in 15 minutes. I've been calling for weeks about my inherited IRA situation. This sounds like a scam to me.

It's not that they call for you - they use some kind of technology that navigates the IRS phone tree and waits on hold, then when an agent is about to pick up, it calls you and connects you directly. So you only need to be on the phone for the actual conversation part, not the hours of waiting. I had the same reaction initially. I was absolutely shocked when I got the call back saying an IRS agent was on the line. I think they have some system that keeps your place in various IRS queues. The agent I spoke with was definitely a real IRS employee and answered all my questions about inherited IRAs. I had tried calling on my own for over a week with no success, so for me, it was definitely worth it.

This is so helpful! My uncle's IRA is traditional, not Roth, so sounds like I do need those annual RMDs. Is there any way to convert it to a Roth now to avoid the annual RMDs and just deal with the 10-year rule?

You can convert an inherited traditional IRA to an inherited Roth IRA, but be careful - you'll pay income tax on the entire converted amount in the year you do the conversion. This could potentially push you into a much higher tax bracket. If you decide to convert, you'd still be subject to the 10-year rule, but you'd eliminate the annual RMD requirements. Many people find it's most tax-efficient to do partial conversions over several years rather than converting the entire amount at once. I'd strongly recommend working with a tax professional to determine if and how much you should convert each year based on your overall tax situation.

I used TurboTax last year for this exact situation. It handles inherited IRA distributions fine, but you need to make sure you indicate it's from an inherited IRA when you enter the 1099-R information. There should be a specific question about whether this is an inherited IRA. The tricky part is that TurboTax doesn't calculate what your RMD should be - you need to know that number from your financial institution. As long as you distribute at least the RMD amount each year, TurboTax will report it correctly on your tax return.

Thank you! That's really helpful to know. I'll make sure to get the RMD calculation from my bank before doing my taxes. Glad to hear TurboTax can handle this if I input everything correctly.