I have earned income in 2025. I do not have a traditional IRA. I only have Roth IRA’s. When I prepare my 2025 taxes in March, I may want to open a traditional IRA for the 2025 tax year. (2025 was another big wildfire year out west).
If I open it in February 2026 for tax year 2025, when do Required Minimum Distributions (RMD)s kick in?
Your account balance as of December 31, 2025 will be $0, so you will not have an RMD required in 2026. Your first RMD will be required in 2027, based on your December 31, 2026 balance. Note: if you convert the entire balance to a Roth during 2026, so your balance on December 31, 2026 is $0, you won’t have an RMD in 2027 either.
AJ
If I understand that correctly, the combined effect is to move 2025 income into 2026. Have I got that straight?
My intention is to reduce my tax bill for year 2025, and to avoid any tax penalty, by making a contribution to a traditional IRA for year 2025. I could do this before December 31st of this year by estimating what my tax bill will be for 2025 and to see if I would be liable for any penalty. But I am lazy, so I would rather wait until March when I hope to have all of my tax forms, and let my tax preparation software tell me what my tax bill will be for 2025. My tax prep software will probably be turbotax.
As always, thank you very much. And if 2026 turns out to be a year of reduced income for me, I probably will convert the probable traditional IRA to a Roth,
Yes, although there can be gains (or losses) that occur between the contribution date and the conversion date, so the movement may not be dollar for dollar.
AJ