Miss your RMD? Assess your options — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily
  • LinkedIn
  • YouTube
  • Twitter
  • Facebook
  • Google+

Miss your RMD? Assess your options

Get PDF file

by on
in Small Business Tax,Small Business Tax Deduction Strategies

Q. I missed taking my required minimum distribution (RMD) from my IRA last year. Can I avoid a 2012 penalty before April 15? H.S., Rochester, N.Y.

A. Maybe. If you don’t have a good excuse, you must report the amount owed on Form 5329, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts, and pay the appropriate penalty on Form 1040. Follow the step-by-step instructions to figure out how much you will owe. However, if you missed the deadline due to a reasonable cause, you can ask the IRS to waive the penalty. A request for waiver may be included in a letter of explanation attached to your tax return along with Form 5329.

Tip: When you request a waiver, don’t pay the penalty up front. The IRS will notify you if it denies the request.

Leave a Comment

Previous post:

Next post: