age 57 inception…age 61 bust!
L1: age 57 inception…age 61 bust!My client began her 72t SEPP around her 57th birthday (March 2, 1957). Today, (age 61) she wants to withdraw extra $$.
If we bust the 72t today, which was $28k/yr, is it right tosay that she is just penalized on the 2014, ’15, and ’16 withdrawals? The January 2017 withdrawal was at age 60.
If that’s correct, is there also an interest penalty on the 10% penalty not received for those three years?
Thanks!2017-09-18 17:08, By: Cubbie1, IP: [18.104.22.168]
L2: age 57 inception…age 61 bust!Yes, if the plan is busted she will only owe the 10% recapture tax on distributions taken PRIOR TO 9/2/2016. Therefore, even 2016 distributions will not be subject to the tax if they were distributed at 59.5 to the day or later. The IRS may or may not choose to bill late interest on the late payment of the recapture tax. Client should just pay the recapture tax due and then wait to see if the IRS bills the interest, which they are certainly entitled to bill.2017-09-18 17:38, By: Alan S, IP: [22.214.171.124]