Hi all,
Last year I missed my 2023 RMD. As a result, I understand you need to file Form 5329 to to either pay the penalty or request a waiver.
As I'm doubling checking the numbers, it seems that the 2023 form instructions have changed compared to 2022 (2022 Form 5329, 2022 Form Instructions), resulting in having to pay the penalty even while requesting the waiver. I know about the reduced penalty from 50% to 25%/10%, but it looks like you have the pay the additional tax even if you request a waiver?
For example, assume a RMD of $500 in 2023 and none of it was taken out
Line 52 Minimum required distribution for 2023 (see instructions): $500
Line 53 Amount actually distributed to you in 2023 (see instructions): $0
Line 54...(RC $500): $0
Now to calculate Line 55, assuming I made the withdrawal within the correction window, using the Line 55 worksheet on page 9 of the instructions:
Line 1. Yes
Line 2. $500
Line 3. $0
Line 4. $500 - 0 = $500
Line 5. $500 * .1 = $50
Based on the worksheet, going back to Form 5329:
Line 55: $50
The instructions mention in regards to line 55 that "you must pay any tax due that is reported on line 55" as you do end up adding it to a Schedule 2.
If I did everything correctly, I must pay the additional tax of $50 on my current return. This is where I am getting confused. I assume applying for the waiver means I do not pay the additional tax unless denied? Previous posts mention not putting 0 into Line 55, but it looks like that was for previous year's forms. So starting from 2023, payments are made in advance before figuring out whether a waiver is approved?
