The Internal Revenue Service has released new life expectancy tables for taxpayers who calculate required withdrawals from Individual Retirement Arrangements (IRAs).
The new tables appear in Publication 590SUPP, "Supplement to Publication 590, Individual Retirement Arrangements (IRAs)." The tables are effective immediately and are optionally retroactive to January 1, 2002. In computing 2002 distributions, taxpayers may use the old tables previously in effect for 2002 or they may choose to use the new tables which provide for a smaller required withdrawal from retirement plans.
Taxpayers are required to begin withdrawing money from their IRA accounts by April 1 in the year following the year in which they reach 70 1/2 years of age. Taxpayers who do not distribute at least the required minimum amount from their IRA accounts may be subject to a 50% excise tax on the amount not distributed as required.
The tables provided by the IRS and the instructions provided in Publication 590, "Individual Retirement Arrangements (IRAs)," will help the taxpayer determine how much to withdraw in any given year.