RE: Periodic Payments_Quetsion on 2022 tax form: “Did you receive payments from this retirement acct. …”?

[sugersam5]

I subnited this last night, but did not receive any emails to confirm or response in TTx "messages" - I don't see it 

Try #2

Hi_

-I took an early retirement from my job (am 63) right before CV19 (not knowing that was coming either, other reasons) and then CV19 started and as of April 2020 I needed to take money from my 401K savings to survive (still taking $$ from 401K- Not employed). I started taking a set amount/month as of that month and since I have changed the monthly $$s a few times, per my needs.

Every time I get to this *question, while doing my taxes on TurTx, which I have been using for the past 12/13 years or longer, I feel I am not understanding it or checked off per my take of its explanation box as my answer (No).

I hope it is not an item that impacts (ed) my tax form, which I am not sure if it does, but it is a new question, as of 2020 tax year, due to taking monthly withdrawals from my 401K and being a retiree.

On the form on TurTx:

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*Q:

“Did you receive payments from this retirement acct. on a regular basis, such as monthly, quarterly or annually?

The Help (Learn More) Box:

Periodic Payments:

>Funds that you receive at regular intervals (weekly, monthly, quarterly, annually) over a predetermined period of time, for example, 15 years, or for life.

>Equal periodic payments are annual withdrawals that you make from a pension plan or 401(k) plan. The amount you withdraw is calculated so that the funds last throughout your expected lifetime.

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-Receiving the monthly over a predetermined period of time…, that was not so much my aim at the time_I just started with an amount that I needed to survive and adjusted as I went on since that April (Re: item 1 on the Help Box)

Or

I did not calculate as such that the acct lasts me for my expected lifetime or am taking funds on annual basis (Re: item 2 on the Help Box)

Perhaps I am looking into this too deep or by saying NO I feel (felt) that answer applies.

Any assistance to understand and apply my best answer is appreciated_

Thank you much.

M_

>>If the answer s/d be a YES, do I have to adjust last 2 years’ returns? I hope not!

[AmyC · Accepted solution]

For someone younger, the goal is to determine if it is a regular payment for a certain time period (like early retirement) or was just some amount randomly taken and used. The goal of the question is to determine if a person needs to pay additional tax for early distributions. See About Form 5329, Additional Taxes on Qualified Plans - IRS.

On the bright side, you are over age 59 1/2 so these rules do not apply to you regardless of the situation or your answer. No need to amend. Yes would be a fine answer in your situation.

[sugersam5]

Miss Amy,

Glad I mentioned the age, since I felt it may be needed due to under 59 1/2 withdrawals that could face a 10% penalty as well as regular tax and in order to eliminate that (under 59 1/2 age) in how an answer may be granted...I thank you for prompt reply.

Be well!

M_