How to Fill Out Form 5329

Submitted by A S on Wed, 2017-11-29 21:31

So I have missed RMDs for 2 different accounts from 2 different financial institutions from 2010-2017.
I am taking out all the corrected RMDs from 2010-2016, as well as this year’s RMD. I have calculated the RMD amounts for each institution’s IRA. I have looked up the account info and the laws and am doing the stretch calculation based on my life expectancy, and already know all about the calculation, the RMDs.

Here are my questions:
Do I need to fill out a form 5329 for year 2017 as well as for years 2010-2016? Or just a form 5329 for years 2010-2016?

Do I write the total amount of the missed RMDs for the form 5329 on each form, since I have 2 different IRA’s from 2 institutions?

Should I attach a letter of explanation for each IRA, so 2 letters each, to each form 5329, or can I just attach 1 letter of explanation and include the rmd amounts for each of the 2 IRAs in the letter?

For line 52 on form 5329, I should put the total of each rmd from each of the iras?

For line 53, I will write the same thing?

For line 54, I will write 0?

For line 55, I will write 0?

Will I be filling out each 5329 the same way (years 2010-2016) once I know how to fill out one form?

Should I write RC and the amount I want waived in parentheses (which will be the amount from line 52 and 53, the total rmds from each ira), do I write it next to line 54, or line 52, or line 53?

Or is it necessary to write the RC and the amount I want waived in parentheses at all, since I will be attaching a letter of explanation?

Can someone please show me an example filled out form 5329 for someone who missed rmds?

I’m sorry for all of the questions. I’m trying to do this myself, and I’ve never done my own taxes without the help of a preparer. In this instance, since I understand the issue so much and the cost for having someone fill out all 6 or 7 of the forms is quite high, I assume once I know how to fill out on one I can fill out the rest.



Submitted by Alan - IRA critic on Wed, 2017-11-29 23:25

  1. You won’t need a 5329 for 2017 if you have withdrawn your 2017 RMD before year end. 
  2. There is only one 5329 for each year regardless of how many IRA accounts are involved. So you show the total of both IRAs on a single 5329, ie. total RMD for the respective year and total amount distributed.
  3. Since your “reasonable cause” for the oversight is the same for each year, you can prepare just one statement without numbers, copy it and attach a copy to each 5329. The 5329 will show the numbers.
  4. For line 52, just show the total RMD for that year for both accounts.
  5. For line 53, enter 0 because you did not take a distribution IN that year.
  6. For line 54, enter “RC”  (reasonable cause) and the amount from line 52 on the dotted line next to line 54 and enter “0” on the actual line 54.
  7. Line 55 will be “0”.
  8. Since the 5329 forms will contain the numbers, you do not have to include those same numbers in the letter of explanation. The purpose of the letter is to explain why you missed the RMDs and that you have distributed the entire shortfall. You might attach a copy of the two 1099R forms you will receive. The 5329s show the actual annual breakdown. 
  9. The actual calculation was the hard part. You should staple all the 5329 forms together with the RC letter and perhaps a copy of the 1099R forms (which is optional to include).

Submitted by A S on Sat, 2017-12-02 10:00

Thank you, Alan! Should I mail all the 5329 forms for years 2010-2016 together with my 2017 tax return?Can all of the 5329 forms for years 2010-2016 go and be sent in the same envelope, or is it better to mail each year separately so as to not increase my scrutiny?Or will this increase my penalty?Can I mail each of the 5329 forms without the 1099-R if I have not received it yet (like if I wanted to submit a form now)? 

Submitted by Alan - IRA critic on Sat, 2017-12-02 17:08

I would mail the 5329 forms together in one envelope, but not with your 2017 return. You could either send the 5329s soon or wait until late January when the 1099R will be issued. If you mail them now, and in the unlikely event the IRS questions you, you can send them the 1099R after it is issued. Another option if you prefer to mail them now is to include a copy of the distribution statement for the IRAs showing the total distribution. The IRS rarely asks for further documentation in this situation or declines to grant the waiver.

Submitted by A S on Sun, 2017-12-03 06:01

I took screenshots of each year’s distributions since I took the 2010-2017 distributions out individually this year, calculated each individual rmd, and withheld tax from each. So there is a clean way to show them the distributions.Should I attach the distribution statement or the screenshot of each year’s distributions from each account along with the 1099 r?

Submitted by Alan - IRA critic on Sun, 2017-12-03 16:56

SInce you already have the screenshots, might as well include them and omit the distribution statements. If you want to send these in now to get this over with, you can forget the 1099R. The IRS is going to get their copy of the 1099R in January anyway.

Submitted by A S on Sat, 2017-12-16 20:27

Here is an example form 5329 that I will “fill out” for you to make sure I am doing everything correctly. Any questions I have are included. Example: Account #1 rmd $500 + Account #2 rmd $500 =$1,000 total rmd Form 5329  Top of form: my name, address. I understand I will NOT be checking amended return since 5329 does not have to amend any of my prior year tax returns?  Part IX Additional Tax on Excess Accumulation in Qualified Retirement Plans (Including IRAs)Line 52: $1,000Line 53: $0Line 54: …RC ($1,000)………$0Line 55: 0 Sign Here only if you are filing this form yourself..sign and date myself Then, do I staple the letter and additional documentation such as screenshots, statements, or 1099-R to the front of the form or the back of the form? What address do I mail the form to? Is there a specific person at the IRS who only handles rmd issues or 5329s that I should mail this to that would speed up or help the process?

Submitted by Alan - IRA critic on Sat, 2017-12-16 22:42

No need for an amended return. All lines 52-55 in your example are correct. Staple supporting material to the back of the 5329 and mail to your current IRS service center. The address for your state is shown on the last page of the Form 1040 instructions for 2016  (2017 not yet released but there are not likely to be any changes).

Submitted by A S on Sun, 2017-12-17 02:52

So I am filling out form 5329 for years 2010-2016. Will I have to send each year’s 5329 to the address listed in the instructions for that year, or just mail it to the address for 2016 or the 2017 once released? 

Submitted by A S on Sun, 2017-12-17 02:55

Can the 5329s that I’m doing for prior years 2010-2017 be e-filed?

Submitted by Alan - IRA critic on Sun, 2017-12-17 03:59

No, cannot be e filed.  Mail all 5329 forms to the IRS center listed on the latest 1040 Inst final page.

Submitted by A S on Tue, 2017-12-05 22:25

Why do you recommend mailing all the 2010-2016 5329s separate from the 2017 return?Which will be less of a flag for the IRS: mailing all the 2010-2016 5329s separately, or mailing them together?And if I mail the 5329s with my 2017 return, would that be less of a flag for the IRS than mailing them all together?If I mail the 5329s before the 1099R is issued, would that create a flag at all for me?

Submitted by Alan - IRA critic on Tue, 2017-12-05 22:37

The 2017 return processing should not be sidetracked due to a manual issue that the IRS may not address for weeks if not months. The IRS does not want amended tax returns submitted with current returns, and this is very similar. That said, it may really not make much difference other than delayed processing of your 2017 return. The IRS receives 5329 forms for waivers in a wide variety ot situations and a wide variety of submission format, but there is no particular “flag” that has been identified, if you are referring to some characteristic that makes them less likely to grant the waivers. They grant mostly all waivers that make any sense whatsover, and many of these are probably submitted in a haphazard manner. Probably, the only characteristic that might have a negative effect would be that of a habitual offender, or someone whose reasonable cause is ridiculous such as intentionally not taking RMDs in order to have the taxable income delayed or done in a low bracket year year.

Submitted by A S on Fri, 2018-03-02 15:14

Hi Allen,It appears as if you are a financial professional. I’m wondering if I can possibly private message you or if necessary pay a small fee so you can review the letter I have written and one of my forms?I want to make sure everything is accurate before I send it.Thank you!

Submitted by David Mertz on Tue, 2017-12-05 23:17

As a general rule, never send anything with your current tax return that does not apply directly to your current tax return.  If mailed with your 2017 tax return, there’s a good chance that the IRS would treat the 2010-2016 Forms 5329 as extraneous to your 2017 tax return and ignore them entirely, otherwise you are relying on the IRS data transcriber to recognize that they need to be separated out and directed to a different department.  Also, you won’t be able to e-file them, so why would you not want to send them separately so that you can e-file your 2017 tax return?

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