L1: davidtinadob 8/4/66. Have SEP retirement account value today 936,612.34. value 12/31/16 was 908,573.00. Value 2/28/17 was 950,542.85. Like to start distribution 5/3/17. End date would be 2/5/2026. Can i use value of account as 950,542.85 to receive higher distribution ?
Do i have to fill out any IRS paperwork ?2017-04-23 17:35, By: dave, IP: [126.96.36.199]
L2: davidtinaYes, you can use the highest balance at 2/28/2017. I think you can only use the 3/31 or 4/30 interest rates if you start 5/3/2017, but you could use 2/28 or 3/31/2017 interest rate if you started before 4/30, if possible.
Regardless, we usually recommend that you separate your IRA into 2 accounts, using the larger one for say $ 900,000 for your SEPP 72-T, and keeping the other $ 50,000 for future emergencies, or to start a 2nd SEPP 72-T at some time in the future, if applicable.
You are now 50 1/2, and a lot can happen in the next 9 years before the end of the SEPP 72-T when you reach 59 1/2. Keeping $ 50K separate can help avoid busting your SEPP 72-T before then, and minimize the disaster of owing the 10% penalty on ALL distributions cumulatively to whenever you bust the plan, especially if it is in the later years of the plan.
Surprisingly, the IRS does not require that you submit your SEPP 72-T plan to them. You must just prepare the plan, and keep a copy, and all related documentation of the account number and balance, interest rate used, method, calculation, and annual amount.2017-04-23 17:50, By: dlzallestaxes, IP: [188.8.131.52]
L3: davidtinaw2017-04-24 04:28, By: dave, IP: [184.108.40.206]
L3: davidtinaMy wife has an IRA with 70K in case emergency. We also have other investments.
If we do start 5/3/17 it looks like interest rate would be 2.55%. Is this true ? I also may work part time contract work. That should be ok as long as I don’t contribute to SEP account.?
So to start this I should just transfer the amount (42,700.85) from Fidelity SEP account to my linked BOA checking account on 5/3/17.? Does your calculation of the numbers come up with that figure ? Sorry so many questions. It seems like a good deal. Usually good deals aren’t true. Just don’t want to screw it up. Thx2017-04-24 04:39, By: dave, IP: [220.127.116.11]
L4: davidtinaYou can contribute to a different IRA, SEP, or SIMPLE plan, or a 401-K or solo 401-K, based upon your employment or self-employment even if you have a SEPP 72-T.
You just cannot make any contributions to the IRA account(s) that constitute your SEPP 72-T plan “universe” (i.e. the one or multiple IRA accounts used in making your calculation of the annual distributions).
Also, if you did not have any earned income for the entire calendar year, and if your wife worked, then you could make contributions to an IRA as a “non-working spouse”. Based upon your tax situation, that IRA contribution could be designated on your tax return as either a “deductible” or a “non-deductible” contribution (by filing form 8606 with your tax return). If your joint taxable income is less than $ 75,000, then you would be in the 15% tax bracket, and it would usually be preferable to designate IRA contributions as “non-deductible”, because ultimately either you or your wife, whomever survives the other, will almost definitely be in the 25% tax bracket eventually, as will your adult beneficiaries after both of you are deceased.2017-04-24 14:54, By: dlzallestaxes, IP: [18.104.22.168]
L5: davidtinai noticed someone said may rate is 2.45. On the first page it seems to say 2.55 ?
Also, can I just take the amount out of the account on 5/3/17 without filling any paperwork ?2017-04-25 00:52, By: dave, IP: [22.214.171.124]
L6: davidtinaThe max rate for a plan started ion May 2017 is 2.55% …The maximum interest rates where the initial plan distribution occurs during the following time periods are: 04/01/2017 – 04/30/2017: 2.53% | 05/01/2017 – 05/31/2017: 2.55% | 06/01/2017 – 06/30/2017: 2.55%
For a distribution, no paper work required – just keep good records/documentation.2017-04-25 01:24, By: Gfw, IP: [126.96.36.199]