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Forgetting RMD turns into tax headache

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in Small Business Tax,Small Business Tax Deduction Strategies

Q. I forgot to take my required IRA distribution for 2012. Is it too late to do it?  M.B., Springfield, Va.

A. Better late than never. The excise tax penalty for failing to take a “required minimum distribution” (RMD) is 50% of the amount due (less any payments you made). Because you already filed your 2012 return, pay the tax penalty by attaching Form 5329, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts, to an amended return. Follow the instructions to Form 5329.  

Tip: If you’ve missed the deadline due to a reasonable cause, ask the IRS to waive the penalty tax. Include an explanation with Form 5329, but don’t pay the tax up front.

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