I initiated an RMD on December 30, 2023, for the 2023 tax year. I thought I was obeying the rules. My brokerage says the RMD will not post until January 2, 2024. Does this mean I blew the date?
If I use form 5329 to explain the circumstances, am I likely to get a waiver? If the form is required, should I go ahead and send it now instead of waiting to file my return?
Thanks.
Was this your first RMD? If so you will simply have 2 RMD distributions to report on the 2024 return.
Going forward, set up the RMD to auto draw by mid December so you don't end up being late again. The IRS will only forgive the penalty once.
Thanks for your help. I have taken RMD's before.
I'm not sure exactly what "post" means. The brokerage will send you a Form 1099-R for the withdrawal. Are they going to send it for 2023 or for 2024? If they send the 1099-R for 2023 then you were not late, and you don't have a problem. You just report the 1099-R on your 2023 tax return.
If they are going to send the 1099-R for 2024, then yes, you blew the date. But you are almost certain to get a waiver of the penalty. File Form 5329 with your 2023 tax return. Do not file it separately. You will have to take your 2024 RMD before the end of the year. The 1099-R that you get for 2024 will include both the late 2023 RMD and the 2024 RMD. You will report it all on your 2024 tax return.
The RMD was initiated on Dec. 29, but my brokerage will record the actual movement of the cash as occurring on Jan. 2, 2024. It's a 2023 RMD.
The brokerage has a skeleton staff today, so they were not able to connect me with anyone who could tell me whether they would send a 2023 or 2024 form, so I came here.
If the distribution does not occur until 2024, depending on the particular circumstances it could be subject to a 10% excess-accumulation penalty unless the IRS grants an exception to the penalty upon request.
If this is your own IRA (not inherited) and this is not your first RMD year, then, yes, you blew the date. Use form 5329 to request a waiver. You aren’t the first person this has happened to, so next year, leave a few extra days. Remember that since your January 2, 2024 withdrawal will be reported as taxable income on your 2024 return but you are using it to satisfy the 2023 RMD requirement, you must withdraw additional funds in 2024 to satisfy your 2024 RMD requirement.
Also, remember that an RMD is not a specific transaction, it is simply the minimum amount you must withdraw at anytime during the year. You can always withdraw more if you want. For example, if your 2023 RMD was $5000, you could have satisfied that by making a $5000 withdrawal at the end of December. But the requirement would also have been satisfied if you had been withdrawing $500 per month for general spending, because your total withdrawals would be more than $5000, and no additional special withdrawal would be needed.