I need paperwork along with my return to resolve an issue with a distribution.
I was late taking my 2022 RMD . I took
in February and took another at the end of the year. I need to see if there’s a penalty and paperwork required to complete my return.
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You want to generally look here: Retirement plan and IRA required minimum distributions FAQs
From this IRS resource we find:
If an account owner fails to withdraw the full amount of the RMD by the due date, the amount not withdrawn is subject to a 50% excise tax. SECURE 2.0 Act drops the excise tax rate to 25%; possibly 10% if the RMD is timely corrected within two years.
The account owner should file Form 5329, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts, with their federal tax return for the year in which the full amount of the RMD was required, but not taken.
Also we go on to find this:
... the penalty may be waived if the account owner establishes that the shortfall in distributions was due to reasonable error and that reasonable steps are being taken to remedy the shortfall. In order to qualify for this relief, you must file Form 5329 and attach a letter of explanation.
Thank you for the opportunity to answer your questions @mhale34
All the best,
Marc T.
TurboTax Live Tax Expert
You want to generally look here: Retirement plan and IRA required minimum distributions FAQs
From this IRS resource we find:
If an account owner fails to withdraw the full amount of the RMD by the due date, the amount not withdrawn is subject to a 50% excise tax. SECURE 2.0 Act drops the excise tax rate to 25%; possibly 10% if the RMD is timely corrected within two years.
The account owner should file Form 5329, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts, with their federal tax return for the year in which the full amount of the RMD was required, but not taken.
Also we go on to find this:
... the penalty may be waived if the account owner establishes that the shortfall in distributions was due to reasonable error and that reasonable steps are being taken to remedy the shortfall. In order to qualify for this relief, you must file Form 5329 and attach a letter of explanation.
Thank you for the opportunity to answer your questions @mhale34
All the best,
Marc T.
TurboTax Live Tax Expert
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