The December 31 deadline nobody's watching: your 2026 RMD.

October's deadline just passed, so everyone exhaled. But a second deadline is already running: if you are required to take money out of a traditional retirement account this year, it has to be out by Thursday, December 31 — and the IRS can charge an excise tax of 25% on whatever you leave in.

What is a required minimum distribution?

A required minimum distribution — an RMD — is the smallest amount you must withdraw from a retirement account each year once you reach the starting age. In the IRS's words, “You cannot keep retirement funds in your account indefinitely.” The money went in tax-deferred; the RMD is how the IRS starts collecting. Withdrawals are generally included in your taxable income, except for any part that was already taxed.

Who has to take one in 2026?

Generally, account owners who have reached age 73 with a traditional IRA, SEP IRA, SIMPLE IRA, 401(k), 403(b), 457(b), profit-sharing, or other defined contribution plan account. If this is not your first year, your 2026 RMD must be withdrawn by December 31, 2026. There are just over 10 weeks left — and custodians get busy in late December, so the last week of the year is the worst time to discover a problem.

What happens if you miss it?

The IRS can charge an excise tax of 25% of the amount you should have withdrawn but did not. A simple example: if your RMD was $20,000 and you withdrew nothing, the excise tax on that shortfall would be $5,000 — on top of eventually taking the withdrawal and paying the regular income tax on it. If you correct the shortfall within two years, the IRS says the rate drops to 10% — $2,000 in that same example. The shortfall is reported on Form 5329. Correcting fast is potentially worth real money; ignoring it is not.

Turned 73 in 2026? Watch the April 1 trap.

Your first RMD is the one exception to December 31: you may delay it until April 1, 2027. That sounds like a gift. It usually is not. Your second RMD is still due by December 31, 2027 — so waiting means two taxable withdrawals land in the same tax year, which can potentially push your income higher than taking the first one in 2026 would have. Taking the first RMD by December 31, 2026 keeps the two withdrawals in separate tax years. Which choice is better depends on your full income picture — that is a numbers question, not a default.

How is the amount calculated?

Generally, each account's RMD is its balance on the prior December 31 divided by a life-expectancy factor from the IRS's Uniform Lifetime Table (a different table applies if your sole beneficiary is a spouse more than 10 years younger). Your IRA custodian or plan administrator may calculate the amount for you — but the IRS is clear that the account owner is ultimately responsible for taking the correct amount on time. Do not assume someone else has handled it.

Who does not have to take one?

Two big exceptions, and both get flattened online. First: Roth IRAs and designated Roth accounts in a 401(k) or 403(b) do not require withdrawals while the account owner is alive — beneficiaries are a different story. Second: if you are still working, you can generally delay RMDs from your current employer's plan until the year you retire — unless you own more than 5% of the business sponsoring the plan, and your plan's own terms govern. That still-working delay does not apply to IRAs: IRA owners must start at the required age even if they are still working.

Already missed one in an earlier year?

Fix it as soon as you find it. Take the missed withdrawal, file Form 5329 for the year the RMD was required, and know that the IRS says the penalty may be waived if the shortfall was due to reasonable error and reasonable steps are being taken to remedy it — that request goes in with Form 5329 and a letter of explanation. A missed RMD found and fixed is a much smaller problem than a missed RMD found by the IRS.

What should you do first?

One check: ask your custodian or plan administrator for your 2026 RMD amount, confirm what you have already withdrawn this year, and schedule the rest well before December 31. If you turned 73 this year, decide the April 1 question with your full tax picture in front of you — not by default. And if you are not sure whether an account counts, or you find a shortfall from an earlier year, get a licensed CPA to look at the actual numbers. The first call is free.

Alex Volkov, CPA is a New York-licensed CPA with over two decades in accounting, focused on resolving IRS tax problems — back taxes, liens, levies, garnishments, and audits — for individuals and businesses nationwide.