Quote:
Originally Posted by champion6
This post is confusing. It seems to imply that the RMD is tax-free if used for specific medical care.
This is not true. Maybe jojo and I have misunderstood.
The only time the RMD is tax-free is if it is donated to a qualified charity. Here is what Vanguard has to say: Taxation of required minimum distributions | Vanguard |
My point is that, if you have money in a tax deferred account, and you incur large medical expenses during the year, you can withdraw as much money as you want and take a tax deduction for medical expenses. So, if your taxable income is $60,000, but you have $90,000 of deductible medical expenses, you can withdraw $30,000 from a traditional IRA in the same year and owe no income tax for the year. The amount you withdraw can be larger than the RMD to take full advantage of a medical deduction. The idea is to time your IRA withdrawals to take advantage of the itemized medical deductions.