I was over 70 1/2 at the end of last year and forgot to take the minimum distribution from my IRA. I know I will pay a 50% penalty but will I still have to withdraw the proper RMD?
Yes. You should immediately make a distribution to include all the monies you should have withdrawn last year. You will still need to take an RMD for the current year by December 31 of this year. Note, that the RMD requirement has been suspended for 2009. You need to report the fact you did not make the required distribution last year, using Forms 5329 and 1040. Include the penalty with your return. Form 5329 and its instructions can be found at: http://www.irs.gov/pub/irs-pdf/f5329.pdf http://www.irs.gov/pub/irs-pdf/i5329.pdf If the excess accumulation (failure to withdraw the required minimum) is due to reasonable error, and you have taken, or are taking, steps to remedy the insufficient distribution, you can request that the tax be excused. In that case attach a letter of explanation with your return. If the IRS approves your request, it will refund the excess accumulations tax you paid.
Related Questions
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- I was over 70 1/2 at the end of last year and forgot to take the minimum distribution from my IRA. I know I will pay a 50% penalty but will I still have to withdraw the proper RMD?
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