IRA Tax question
I have a client that forgot to take out part of his RMD for 2012, can he file for a extension of some sort. I mean if he takes it out now, will he be able to file for some sort of extension so he doesn’t have to pay the penalty.
I have a client that forgot to take out part of his RMD for 2012, can he file for a extension of some sort. I mean if he takes it out now, will he be able to file for some sort of extension so he doesn’t have to pay the penalty.
Permalink Submitted by Alan - IRA critic on Thu, 2013-01-24 23:32
He needs to follow the instructions on p 7 of the 5329 instructions and file the 5329 with a request to waive the penalty for “reasonable cause”. The IRS usually approves the waiver for taxpayers who self report the omission and immediately make up the missed distribution. The 5329 should be filed with the 2012 return requesting the waiver, but his missed RMD will be taxable in 2013 along with the 2013 RMD. He will not report the missed income on his 2012 return and no extension is necessary. Here is the 5329 Inst: http://www.irs.gov/pub/irs-pdf/i5329.pdf