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IRA contribution before starting SEPP
Is it possible to make an IRA contribution early in the year for lowering MAGI from the previous year and then begin a 72T withdraw 30 days later?
Yes. But, under normal circumstances, IRA contributions must be made by the initial filing deadline of 4/15. In 2020 that deadline was deferred to 7/15/2020 for 2019. In 2021 that deadline was deferred to 5/17/2021 for 2020.
Accordingly, you are too late to make an IRA contribution for 2020.
However, if you are asking if you will be able to make an IRA contribution for 2021 in 2022 before 4/15/2022, the answer is yes. Then the question becomes "what balance do I use for my SEPP 72-t?" I think the answer is that these are unrelated events because the balance to be used for the SEPP 72-T is not the balance as of 12/31 (which is always used for normal RMD distributions. The balance is a "reasonable balance", usually within 6 months of the first distribution from your SEPP 72-T plan which would represent the start of your plan.
You might want to be more specific about the dates that you are talking about, past, present, or future.
This would be in Jan. 2022 for the 2021 tax year. Make the IRA contribution to offset MAGI, then start SEPP. I guess I would just use the 12/31/21 balance for the 72T calculations. This would be a one time event.
Thanks for the help.
I think that if you wanted a higher SEPP Distribution figure, you could wait until after 1/31/2022 to start your SEPP 72-T plan, and use the higher balance at 1/31/2022 which would include the Jan 2022 IRA contribution.