ROCHESTER, N.Y. (WROC) — As New Yorkers eye retirement in 2020, there is new information about Required Minimum Distributions.

CPA Jamie Block discussed these changes and more Monday during News 8 at Sunrise.

“So, with anything, times change, and so does the tax law, which keeps me in business,” Block said. “One thing to note is that Required Minimum Distributions used to be – before the Secure Act was passed – money you had to take out of your IRA, your SEP, your SIMPLE, or qualified retirement plan when you turn 70 and a half years of age. Okay, forget that rule. Now the new rule is age 72. So if you turn age 72 in 2020, now you have to take the Minimum Distribution from your IRA.”

Block said to calculate what your minimum distribution is you take the value for the prior year, so for 2020, it would be 12-31-2019, and you divide it by your life expectancy. So you have to look at the IRS table. If you turn 72 in 2020, your life expectancy is 25.6 years. So if you have $100,000 in an IRA, divide it by that life expectancy number of the 25.6, and you roughly have to take around $3,907.”

Block noted there is a special delay that you can do only in the first year. “So for example, if I turn 72, 2020, I can take that distribution by the end of this year or I have until April of 2021 to take that distribution.” She added, if you do delay the initial distribution, you will have to take two distributions the following year and that will create more income.

If you’re still working, there are exceptions. “When you hit 72, you have to take money out of that IRA,” said Block. “But if you have a qualified plan such as a 401(k) or a 403(b), and you’re still working, you don’t have to take that money out.” Check with your CPA.

Being charitable can make the Required Minimum Distribution easier for some. “This is a really fantastic method to give money to charities,” noted Block. “First off, this is called a Qualified Charitable Distribution, or QCD. We love our acronyms. And what you can do, is when you turn 70 and a half – this age didn’t change with the Secure Act – you can donate up to $100,000 per person, directly to a charity. So the IRA company would write a check to the charity. It can’t be something that you receive and then write a check. Again, the money must go directly to the charity. And when you hit 72, you can actually do this charitable distribution in lieu of your IRA distribution to yourself. So for example, if that $3,907 that I have to take out, I don’t need the money and I don’t want to report the income, I could donate it directly to a charity and that doesn’t even hit my tax return. And what’s really nice about this, especially after the passage of the tax legislation, you don’t have to itemize to do this, and it reduces your income.”