Commentary · Tax Strategy

The First RMD Has Two Deadlines.

Written by the William Allan team · Published 2026-11-02

How to choose between December 31 and April 1 for your first required minimum distribution

Your first required minimum distribution comes with a grace period that no later one gets. It can wait until April 1 of the year after you reach the required age. Every RMD after that is due by December 31. IRS RMD FAQs

The extra three months look free, and sometimes they are close to it. But if you use them, your first two RMDs land on the same tax return.

If you were born in 1953, you turn 73 in 2026 and this choice is yours right now. You can take your first RMD by December 31, 2026, and your second by December 31, 2027. Or you can wait, and take the first by April 1, 2027, and the second by December 31, 2027. Under current law the starting age is 73 for most people reaching it now and 75 for people born in 1960 or later.

How the Two Options Differ

An IRA's RMD is the prior December 31 balance divided by a factor from an IRS life expectancy table. For an owner turning 73, on the table most people use, that factor is 26.5, so a $1,000,000 balance means an RMD of about $37,700. A different table applies if your spouse is your sole beneficiary and is more than 10 years younger. IRS Publication 590-B

The taxable part of a withdrawal counts as income in the year you take it, regardless of which year's RMD it satisfies. So an RMD for 2026 taken in March 2027 goes on your 2027 return, alongside the RMD for 2027.

Waiting also makes the second IRA withdrawal a little larger. The calculation uses the December 31 balance with no adjustment for later withdrawals, so money you left in the IRA through the end of 2026 stays in the number that sets the 2027 RMD, even though you take it out a few months later. 26 CFR 1.408-8(b)(2) Employer plans use their own balance rules, so ask the plan how it handles this.

A Worked Example

Consider a hypothetical married couple filing jointly. One spouse turns 73 in 2026 and the other is 71. They have $60,000 of Social Security and $30,000 of other ordinary income each year, take the standard deduction, and hold $1,500,000 in pre-tax IRAs at the end of 2025. To keep the math plain, the balance earns no return.

• Taking the first RMD by December 31, 2026: about $56,600 comes out in each of the two years. Federal income tax is about $10,300 a year, or about $20,600 in total.
• Waiting until April 1, 2027: nothing comes out in 2026 and about $115,400 comes out in 2027. Federal income tax is about $200 for 2026 and $23,400 for 2027, or about $23,600 in total.

Waiting costs this couple about $3,000 more in federal income tax over the two years, on about $2,200 more in withdrawals. Part of the stacked year falls in the 22% bracket instead of the 12% bracket, and the higher income cuts their senior deduction roughly in half.

At a $2,000,000 balance, the same household pays about $6,000 more. Its stacked year also crosses the $218,000 income threshold for a Medicare surcharge, which adds about $2,300 in premiums for the couple two years later, at 2026 rates. We explain that lookback in our piece on Medicare IRMAA.

These figures use 2026 federal brackets, deductions, and Medicare tiers for both years, because the IRS had not published 2027 amounts when this was written. They leave out state income tax and any investment return, including what the money could earn by staying in the IRA a few months longer. They are an illustration, not a projection of anyone's results.

When Waiting Can Make Sense

The question is what each year's return will look like, and waiting tends to help when income falls sharply from one year to the next. A final year of full pay, severance, a business sale, or a large capital gain can all put this year in a higher bracket than next year.

Take the same couple with a $1,000,000 IRA, $420,000 of other income in 2026, and $20,000 in 2027. Here waiting lowers the two-year federal income tax bill by about $6,400, because the first RMD moves out of the 32% bracket.

A charitable plan can also change the comparison. A qualified charitable distribution from an IRA counts toward your RMD and stays out of taxable income if it meets the rules, as we cover in our QCD article.

Rules That Can Change Your Answer

Roth conversions have to wait their turn. RMD dollars cannot be rolled over or converted, and starting January 1 of the year you reach your RMD age, money coming out of an account counts toward the RMD until it is satisfied. 26 CFR 1.402(c)-2(f) The April 1 option does not change that. If you plan to convert to a Roth in your first RMD year, the RMD comes out first.

Working past your RMD age can delay RMDs from your current employer's plan until you retire, if the plan allows it and you do not own more than 5% of the business. That exception does not reach traditional, SEP, or SIMPLE IRAs, which start at the required age whether you are working or not. IRS RMD FAQs

Multiple accounts follow different rules. You calculate an RMD for each IRA but can take the total from any one or more of them, and the same is true of 403(b) contracts. Each 401(k) and 457(b) plan has to pay its own RMD. An inherited IRA follows its own schedule. Roth IRAs and designated Roth accounts have no RMD while the owner is alive.

If You Miss the Deadline

A missed RMD may trigger an excise tax of 25% of the shortfall, or 10% if you correct it within the correction window, which can run through the end of the second year after the tax is imposed. You report it on Form 5329, and you can ask the IRS to waive the tax if the shortfall came from a reasonable error and you are fixing it. IRS Publication 590-B

Before December

To compare the two options, you need your December 31, 2025, balances for each account, an estimate of 2026 income, and a realistic estimate of 2027 income. Your CPA can run both years side by side. You can also test each year in our Roth conversion and IRMAA planner, which shows how close a year's income sits to the next bracket and Medicare tier.

Ask your custodian for its year-end processing cutoff, and do not assume it will send the money without a request.

Withholding is worth raising in the same conversation. Federal tax withheld from a withdrawal is generally treated as paid in equal parts across the year, whenever it was actually withheld, so a December RMD can help cover tax you did not pay earlier in the year. IRS Publication 505

Where an Advisor Fits

RMD timing is one line in a larger withdrawal plan: which accounts pay for what, how much income each year can carry, and how Social Security and Medicare respond. We cover that in where the retirement paycheck comes from and in our tax planning approach.

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Schedule a free introductory call with Ian, who handles first conversations for William Allan. The call is not advice; its purpose is to understand your situation and help arrange the right next step with the advisory team.

This commentary is for informational purposes only and is not investment, tax, or legal advice. All investing involves risk, including the possible loss of principal, and past performance does not guarantee future results. The examples are hypothetical, are not based on any client, and do not represent any investment's performance. Rules and figures were checked November 2, 2026, against IRS publications and Treasury regulations and can change; 2027 federal tax amounts had not been published at that time. Your RMD age and amount depend on your birth year, beneficiaries, and account types, so confirm them with your custodian or tax professional. William Allan does not provide tax or legal advice; tax preparation and tax advice, when provided, are through affiliated Crawshaw CPAs under a separate engagement. William Allan is an investment adviser registered with the SEC; registration does not imply any specific level of skill or training.