L1: 72tHave been taking a 72t distribution for 2 years. We were disappointed with the Financial Institution and moved our IRA to Vanguard. Didn’t realize this would cancel our 72t distribution from the old IRA. It’s my fault, but was not advised by the old Advisor.
Is this correct?
Would we pay the 10% on the past distribution ($27,000), plus interest and begin a new one at Vanguard?
Thank you2017-05-17 04:24, By: dentin, IP: [188.8.131.52]
L2: 72tIf you transferred all the funds to Vanguard, how could the previous custodian make a distribution? Did you make Vanguard aware that the IRA was part of a SEPP?Which annual distribution (2016?) did you miss?
Your last statement would be correct if you missed the distribution for 2016 or earlier.
2017-05-17 10:24, By: Gfw, IP: [184.108.40.206]
L2: 72tdid you take all of your SEPP distributions in 2015 and 2016? When did you transfer the IRA to Vanguard, was it this year?
A lot of advisors are not very familiar with the rules on 72(t). Vanguard wouldn’t know you were doing SEPP distributions, they just know they have a new IRA account.
Creating an Excel spreadsheet is also useful in tracking how much you’ve taken for your SEPP in a given year. Every time I take a distribution I add the date and amount to the sheet and it subtracts the distributions so far in the year from my required annual SEPP. That way I know, down to the penny, how much more I need to take out before the year is over. It’s a prebuild sheet going forward for all years of my SEPP. Pretty useful very little work required going forward on my part.2017-05-17 15:43, By: brkr12002, IP: [220.127.116.11]
L3: 72tIf you were taking monthly distributions, and in 2017 you missed 1 or more monthly distributions, there is no problem. You can catch up by taking extra distributions before 12/31. You just have to make sure that your ANNUAL total of distributions is the same correct amount. You do not have to take distributions at the same frequency every year.2017-05-17 20:25, By: dlzallestaxes, IP: [18.104.22.168]