Retirement Savings and Benefits
Questions and comments about IRAs, 401k accounts, social security, and other forms of retirement savings and benefits.
RMD and deadline and tax program
Posted by: Hankj, April 8, 2017 11:51PM
Due to a confusion with a 403b which I found don't do a charitable distribution long story short - they were supposed to send the RMDin 2016, but didn't but I met the April 1 deadline and realize it will be income in 2017.

Also a Charitable distribution from a traditional IrA was taken in 2016 to fullfill that requirement.

Question: trying to fill out Computer tax program HRBlock. How do I handle the distribution that is actually legally taken out by the deadline (April 1), but program seems like I have to pay a penalty and then get the money back. It seems more straight forward if I include the total required distribution for 2016 and put that both were taken then even though technically one was March 2017 -

Thanks

Re: RMD and deadline and tax program
Posted by: Alan S., April 9, 2017 03:32PM
You only report distributions in the year they were actually distributed.

However, you mentioned 4/1 as your required beginning date for the 403b RMDs. When did you reach 70.5 and when did you retire from the 403b sponsor? If 2016 was not your first 403b RMD distribution year, your 2016 RMD was late and you will have to file a 5329 with your 2016 return to request a penalty waiver. The IRS usually approves the waiver, so do NOT send penalty money to the IRS. In the unlikely case that they deny your waiver, they will notify you and you can send the penalty then.

If 2016 was your first RMD distribution year then your 403b distribution was not late and you do not report it in any way on your 2016 return.

Perhaps you should consider a direct rollover of the 403b to your IRA to simplify things. If you do that this year, the 403b will have to distribute your 2017 RMD before or at the same time as the IRA rollover, but either way you will end up with 2 years of 403b RMDs taxable in 2017.

Re: RMD and deadline and tax program
Posted by: Hankj, April 9, 2017 07:17PM
Thanks - I think I have it. Yes, this is the first RMD so I understand I had until April 1, 2017. Unfortunately it will make 2 Distributions in one year because of the company not paying out in 2016 as I'd asked.

so when I do my 2017 taxes I'll have the 1st year hang over 2016, and also the 2017 normal and the company will send me a paper that shows 2016 & 2017 RMD when they send to me in Jan 2018.

Very confusing, but hope I have under control now.
Thanks.

Re: RMD and deadline and tax program
Posted by: Alan S., April 10, 2017 12:06AM
That is correct. You will get a single 1099R showing the total of both RMDs taken in 2017. There is no break out on the 1099R and you do not need report it any differently or provide an explanation or breakdown on your 2017 return either.

Re: RMD and deadline and tax program
Posted by: Hankj, April 10, 2017 12:30PM
Thanks for the help -- got it!!



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