AmyC
Expert Alumni

Retirement tax questions

The schedule 2 would show your penalty. Instead, you can request a waiver of the penalty. Usually anything reasonable will be allowed. If there was a misunderstanding, give it a try. If they deny it, you can pay the penalty. The 5329 can be sent in with your return. Of course, you need to be in the process of getting that missed amount into your hands, if you haven't already.

 

You may qualify for a waiver if you have a good reason for missing the RMD and have now tried to remedy the situation with a distribution. The instructions state: 

Waiver of tax. The IRS can waive part or all of this tax if you can show that any shortfall in the amount of distributions was due to reasonable error and you are taking reasonable steps to remedy the shortfall. If you believe you qualify for this relief, attach a statement of explanation and file Form 5329 as follows.

1. Complete lines 52 and 53 as instructed.

2. Enter “RC” and the amount of the shortfall you want waived in parentheses on the dotted line next to line 54. Subtract this amount from the total shortfall you figured without regard to the waiver, and enter the result on line 54.

3. Complete line 55 as instructed. You must pay any tax due that is reported on line 55.

The IRS will review the information you provide and decide whether to grant your request for a waiver. 

@Percival

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