IRS Waives 2024 RMDs for IRA Beneficiaries Under 10-Year Rule

Under the 10-year rule, he explained, “the entire inherited IRA balance must be withdrawn by the end of the 10th year after death. This could result in a boatload of taxes in that year for beneficiaries. The better move for many beneficiaries is to take distributions throughout the 10-year term, even if not required, in order to smooth out the overall tax bill and take advantage of our current low tax brackets. These current tax brackets remain for only this year and next year.”

Unless Congress acts, Slott continued, “tax rates are scheduled to increase in 2026. Yes, IRS RMD relief sounds good, but advisors should be helping their clients keep tax bills low and maybe decline this IRS relief.”

Remember, Slott warns, “that paying the tax on RMDs is not an ‘if’ but a ‘when.’ These taxes will have to be paid, so may as well get the funds out when the tax rates are the lowest, which for many is right now. Deferral in this case may be a short-sighted and expensive tax strategy.”