Missed RMD
My client missed taking his 2021 RMD. He did take his correct RMD in 2022. But just for 2022. 2021 missed RMD was not discovered until early 2023. He has now taken his correct 2021 RMD and correct 2023 RMD in 2023. How do I disclose the missed 2021 RMD, let the IRS know it’s been identified and taken in 2023 and ask for penalty relief?
Permalink Submitted by Alan - IRA critic on Wed, 2023-03-22 15:55
Assuming this was an owned RMD, not inherited, client needs to file Form 5329 for 2021 with Form 1040X and provide an explanation of “reasonable cause” for missing the RMD, and indicate the portion of the 2023 distribution that included the late RMD. While the 5329 (Part IX) is only 4 lines, they are not intuitive so the instructions need to be read, particularly for lines 54 and 55. The IRS has been waiving the penalty in almost all cases.
Permalink Submitted by George W Smith IV on Fri, 2023-03-24 11:02
This is just what I needed. Thank you