A Taxpayer Must Begin Withdrawals from Any Type of Retirement

question 102

True/False

A taxpayer must begin withdrawals from any type of retirement plan (except a Roth IRA) no later than April 1 of the tax year after the taxpayer reaches age 70¹/₂ or, if later, the year they retire.

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Definitions:

Mandatory Payroll Deductions

Compulsory deductions from an employee's paycheck by the employer, covering taxes, social security, and other legally required withdrawals.

Voluntary Deductions

Amounts that a person chooses to have withheld from their paycheck, such as contributions to retirement plans or health insurance premiums.

Payroll Expenses

Costs associated with compensating employees, including wages, salaries, bonuses, and related taxes and benefits.

Net Pay

The amount of an employee's earnings after all deductions, such as taxes and retirement contributions, have been subtracted.