Q: What is the penalty if I miss taking my required minimum distribution (RMD) for the tax year 2024?

A: The penalty for a missed RMD or less than full RMD is 25% on what was not taken. However, if the failure is “timely corrected within two years,” according to the IRS, the penalty is reduced from 25% to 10%.

Q: I inherited a traditional IRA in 2023 from someone who had begun taking RMDs. When do I have to take the first RMD from my inherited IRA?

A: The IRS has waived the inherited RMD for the tax year 2024, but you must take a RMD in 2025. In most cases, you are required to take all the funds in the inherited IRA by the end of the 10th year starting with the following year after the decedent’s death. The annual RMDs will continue till 2032 and then in 2033, you must take out the remaining balance.

Q: My dad spends about 10 hours per week for charity. Can he deduct his time on Schedule A?

A: No, volunteer time for charities is not deductible. Your dad can deduct any out-of-pocket expenses connected with his charitable work, but not his time. Charitable car mileage is deductible at 14 cents per mile for 2024.

Q: My brother who is 53 years old inherited an IRA from his grandmother in July. When is the first RMD required from his inherited IRA?

A: Your brother’s first RMD is in 2025 and continues through 2033. By the end of 2034, your brother must take out the remaining balance.

Q: The IRS suspended inherited RMDs for 2023 and 2024. If I inherited my father’s IRA in 2023, when do I have to take my first RMD?

A: Beginning in 2025, beneficiaries who inherited an IRA and are not EDBs (eligible designated beneficiaries) must take annual RMDs if the decedent started taking his RMD. If the decedent was not required to take an RMD, then you have to take an annual RMD starting in 2025. However, you must deplete the entire IRA balance by the end of 2033, regardless if the decedent started his RMD or not.

Q: What is the open enrollment for Medicare?

A: People under Medicare coverage can switch from the traditional Medicare to a Medicare Advantage program and to other Medigap insurers from Oct. 15 through Dec. 7. Medicare Advantage plans are offered by private insurers that cap your out-of-pocket expenses and most cover dental, hearing and vision care. As long as your doctor belongs to the network, a Medicare Advantage plan offers significant benefits. If you stay with the traditional Medicare then you should purchase a Medigap policy to reduce your medical expenses.

Richard Rysiewski, a certified financial planner, welcomes all questions on tax and financial matters. Send them to Richard Rysiewski, Financial Doctor, 3001 Hartford Lane, Shelby Twp., MI 48316.