RMD Taken One Year Late

[creswela]

I have a question regarding taking an RMD late.  I turned 70 1/2 in 2016, and had a small deferred compensation account that I established just before I retired in 2004.  It was a small account, and I didn;’t keep track of it as well as I should have, and consequently didn’t see the notice from the account administrator regarding taking the RMD until after I filed my 2016 tax return in April 2017.   I filed the paperwork to start receiving 5 distributions to be taken annually over the following 5 years.   My first distribution was made in October of 2017, leaving me with no distribution or 1099R in 2016.  I will likely have to pay a penalty, but need to advise IRS of this late distribution, and I’m not sure how to handle it. I have the 2016 year-end statement showing the account value at the end of 2016, so I can estimate how much the 2016 distribution should have been (1/5 of the 2016 account value).  I have reviewed similar questions/answers regarding this topic that have been asked by others, but most of the ones I saw didn’t match my situation, and I am not sure how I should proceed.  It appears I need to file a Form 5329 for 2016 to explain and calculate the penalty.  I have downloaded a blank Form 5329 but the following questions come to mind:

Does it need to be filed with my 2017 return?

Independently by itself?

Or do I need to file an amended 2016 return and include Form 5329 with that?

Thank you for any guidance you can provide,  creswela.

[CarolC]

You will mail in the 2016 Form 5329 separately (without amending your 2016 tax return).  If you provide a reasonable explanation, and any documentation to support your RMD omission, the penalty may be waived.

Remember, you need to take the missed RMD as soon as possible if you haven't done so already.

Keep in mind, if you have other retirement plans, the combined RMD amount can be taken from one account.  To do this, you would total all account values and then determine the RMD amount using this combined total.  The combined total value is based on "the account balances" at the end of the prior calendar year.  For your 2016 RMD, you will use the December 31, 2015 balances to determine your RMD amount.

I'm sharing this because you may have taken an RMD for another account.  Perhaps there was excess that could apply towards your deferred compensation account RMD.  Fingers crossed.  Also, you will not mail the 2016 Form 5329 with your 2017 return.