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rwrturbo
New Member

I need help with a SEP IRA RMD??

We forgot to take the RMD on my wifes SEP IRA.  The deadline was April 1st 2017.  The RMD is $13.65.  Total of IRA is $451.90.  Would like to close account.  What would you suggest?

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Accepted Solutions
MichaelDC
New Member

I need help with a SEP IRA RMD??

Since 2016 is your first year for which RMD was required, the deadline for taking 2016 RMD was April 1, 2017. Take it out as soon as possible. Since it is such a small amount, it may go unnoticed. Also, a distribution in excess of the RMD from one account may satisfy this account. The small amount may also justify taking the entire amount as a distribution this year or at least roll it over and consolidate it for easier record-keeping. You'll receive 1099-R next year and report it on 2017 tax return.  Just please be sure to take the RMD for 2017 also.

As to how the distribution be taxed... it will be reported and taxed as a regular distribution.  You will receive form 1099-R with the distribution, and TurboTax will ask how much was the RMD, since it may include both, 2016 and 2017 RMD amounts, you will be able to indicate that your RMD is taken in full... no special treatment applies here.

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1 Reply
MichaelDC
New Member

I need help with a SEP IRA RMD??

Since 2016 is your first year for which RMD was required, the deadline for taking 2016 RMD was April 1, 2017. Take it out as soon as possible. Since it is such a small amount, it may go unnoticed. Also, a distribution in excess of the RMD from one account may satisfy this account. The small amount may also justify taking the entire amount as a distribution this year or at least roll it over and consolidate it for easier record-keeping. You'll receive 1099-R next year and report it on 2017 tax return.  Just please be sure to take the RMD for 2017 also.

As to how the distribution be taxed... it will be reported and taxed as a regular distribution.  You will receive form 1099-R with the distribution, and TurboTax will ask how much was the RMD, since it may include both, 2016 and 2017 RMD amounts, you will be able to indicate that your RMD is taken in full... no special treatment applies here.

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