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Partial Year Payment possible?
- Date of Birth:9/1/62
- Annual cash needed year 1 (after taxes):none after next year until 67
- Annual cash needed later years (after taxes): 40k
- How are you planning on paying taxes? (withholding or quarterly estimates):working ft again -withheld
- 72t Calculation Method: Amortization method
- 72t Distribution Start Date:3/29/18
- *Life Table Used:distribution factor 19.596
- Stub Year (Y/N):? Started plan March 29, 2018- Ending March 2023
- Annual Recalc (Y/N):N
- *Interest Rate:2.78
- *72t Account Balance(s) with account type (traditional IRA, Roth, SEP-IRA, SIMPLE-IRA, 401k, 403b, etc.):798,905.31
- Describe other assets if applicable (taxable, Roth, other income, etc.) and how much is in each account.80k other IRA, 40k cash own home -no mortgage current income 65k.
Based on guidance from this site, I noted that my first modification date is 3/30/23. I have been taking $40,768.07 every year since I started this plan. My question is ...Can I take a 1/4 payment for 2023 since it is only January -March 3/3023 and plan ends 3/3023? I am working full time again and do not need the funds.
Thank you in advance for the guidance.
*For these items see new guidance as of January 18,2022 in IRS Notice 2022-6.
I think it depends how you have been taking your distributions, as well as for 2022 and 2023. Many people confuse the requirements. You must take the distributions for the equivalent of 60 months/5 years worth, regardless what frequency you use, and you cannot terminate your plan until the later of 60 months or age 59 1/2. You did not indicate how much you took in 2018 when you started the plan, or your frequency.
Let me explain the significance. If you took an ANNUAL DISTRIBUTION in March 2018, 2019, 2020, 2021, and 2022, you would have satisfied the "5 years' worth" requirement, but you would have only been in the plan for 49 months in March 2022. That is why the website shows your "modification date" as March 2023. However, if you have been taking your distributions on a monthly, quarterly, or semi-annual basis, then you will need to take the last "installment" before your plan ends in March 2023. If you take the last 3 months' worth in Jan-Mar, 2023. You will not have to take a full calendar year in 2023.
I have taken annual distributions in March 2018, 2019, 2020 2021 and 2022. So, with that in mind, just to confirm, I can take 1/4 of the annual amount to satisfy my plan requirement in 2023? Thank you!!
To clarify, I would rather NOT take any further distributions but I don't want to bust my plan!