You can proceed with your tax return. Do not include anything for the RMD you didn't take. It will be a doubled distribution for next year. However, there is a 50% additional tax if you don't take prompt action on the RMD.
- Immediately contact your plan provider to take the late RMD now. Make this a separate transaction. Do not combine it with the RMD that is due for the current year. To have the 50% additional tax waived, the error must be promptly corrected.
- File IRS Form 5329, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts. The additional tax does not have to be prepaid, but if the IRS determines that it is owed, there could be interest owed on the additional tax payment.
- Attach a letter of explanation to Form 5329. The letter should include why the RMD was missed, the fact that it has now been taken, and describe the steps taken to ensure that future RMDs will be taken as required.
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