A single scheduling choice on a retirement account can quietly double a person’s taxable income for a year. Savers who reach the age at which required minimum distributions begin are allowed to delay that first withdrawal past year-end, but the delay comes with a catch that shows up on the following year’s tax return: two required distributions counted as income in the same twelve months.
The Grace Period Behind the Trap
Federal rules give IRA and retirement-plan owners a one-time grace period on their very first required minimum distribution. Rather than taking that first RMD by December 31 of the year they turn 73, an owner may wait until April 1 of the following year, according to the IRS’s required minimum distributions FAQ page. No other RMD in a saver’s lifetime gets this extra runway; every distribution after the first is due by December 31 of its own year, with no April extension available.
Why Two Withdrawals Can Land in One Year
The grace period does not push back the second RMD along with the first. An owner who waits until April 1 to take the RMD tied to the year they turned 73 must still take their second RMD, the one tied to the following year, by December 31 of that same following year. Both withdrawals then count as taxable income in the same calendar year, according to the IRS’s retirement topics page on required minimum distributions, which walks through the identical scenario: an owner turning 73 in one year owes a first RMD by April 1 of the next year and a second RMD by December 31 of that same next year.
The account owner does have a way to avoid the stacked income. Taking the first RMD by December 31 of the year of the 73rd birthday, rather than waiting for the April 1 deadline, spreads the two distributions across separate tax years instead of compressing them into one.
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The Tax Consequences of Doubling Up
Two RMDs landing in one calendar year raise ordinary taxable income for that year, which can push a saver into a higher marginal tax bracket than either distribution would trigger on its own. The bump can also raise Medicare Part B and Part D premiums two years later, since those premiums are set using income-related surcharges based on tax returns filed two years prior. A larger combined withdrawal can additionally increase the taxable share of Social Security benefits received in that same year, compounding the effect of the doubled distribution.
Weighing the Delay Against the Cost
The April 1 delay still makes sense for some savers, particularly those expecting notably lower income in the following year, such as someone retiring partway through the year they turn 73. For most owners with steady income, tax professionals generally point to taking the first RMD before year-end as the simpler path, since it avoids stacking two distributions into a single tax return and keeps each year’s income closer to its usual level.
This article was produced with AI assistance and reviewed by The Financial Wire editorial team.
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David M. Keller is a finance writer based in Columbus, Ohio, covering personal finance and consumer-focused economic topics. He earned his degree in journalism from Ohio University and began his career reporting on local business and economic trends for a regional media outlet. Since then, he has contributed to a variety of online publications, focusing on clear, practical coverage of topics such as cost of living, debt, and everyday financial decision-making.
