@macuser_22 wrote:
@Matt133 wrote:
Thank you very much for the in-depth reply.
If the RMD would have been extremely small, is the penalty on a portion of the specific RMD value I missed for 2021?
Also, if the penalty would be insignificant, can I skip the 5329 altogether for 2021 and pay the penalty in 2022?
Thank you again,
Matt
See my post above. You should not pay the penalty at all but ask for a waiver as explained above. The penalty is huge - 50% of the amount of the missed RMD - if the RMD was $1000 then the penalty would be $500, but nobody pays it because the IRS almost always grants the wavier. In any event the 5329 for 2021 must be filed, it cannot be deferred to a later year.
Additionally, if you make a withdrawal now (Feb 2022) to count as your 2021 RMD (assuming the IRS grants your waiver application), you still need to make another withdrawal during 2022 to count as your 2022 RMD.
Also remember, an RMD is not a specific transaction, it is a dollar amount based on the account size and your age. If you are required to withdraw $1000, you could satisfy that with a single withdrawal on December 30, but it would also have been satisfied if you withdrew $2000 in June to pay for a vacation. You don't have to withdraw another $1000 as a specific "RMD" withdrawal.
