Age 59 1/2 question…….
L1: Age 59 1/2 question…….
I will be 59 1/2 in November of this year. For IRS purposes, will I be considered under 59 1/2 for the 2012 tax year, and then over 59 1/2 for the 2013 tax year? Or, sinceI will be 59 1/2 before the end of the year, can I make that exception for the whole
year of 2012?
2012-01-17 22:07, By: John T., IP: [188.8.131.52]
L2: Age 59 1/2 question…….
You will be age 59.5 on the day that you turn age 59 + about 186 days = Using your November date, you wuill turn 59.5 some time in November 2012. Don’t forget that 2012 is a leap year. You would have been born around May ?, 1952
2012-01-17 22:10, By: Gfw, IP: [184.108.40.206]
L3: Age 59 1/2 question…….You did not mention the date of your first distribution. It had to be prior to Nov 2007 in order for you to be able to terminate your plan in Dec 2012 (after your 59 1/2 “birthday”. Otherwise, it will be the later of the 5 years/60 months, and not 59 1/2.2012-01-17 22:21, By: dlzallestaxes, IP: [220.127.116.11]
L4: Age 59 1/2 question…….
Please re-read the original post as it did not ask a 72(t) question. It only asked, in directly, when was he considered to be age 59.5 and GFW provided a good answer.
BTW, which professional tax prep software do you use? I’m adding tax prep to my business this year and I’m using TaxWise from CCHSFS.
2012-01-17 22:40, By: Jim F, IP: [18.104.22.168]
L5: Age 59 1/2 question…….
Maybe I made an invalid assumption that someone asking a question on a website devoted to SEPP 72-T was asking in that context. If it was merely an IRA question unrelated to SEPP 72-T, I would hope that he would ask his tax advisor or get a tax reference
boiok, or ask the IRS, rather than waste our time on non-SEPP 72-T questions.
I use the most comprehensive, most expensive tax software, CCH PROSYSTEM FX, but they do have a “per return” pricing structure.
2012-01-17 22:51, By: dlzallestaxes, IP: [22.214.171.124]
L6: Age 59 1/2 question…….
I am not trying to waste anybody’s time. I asked the question in regards to 1009-R coding. I took my first SEPP distribution in July 2010, so I know I have 5 years from that date. But the company didn’t code my 1099 -R correctly for 2010 and I had to fight
them. They coded it correctly for 2011. So I was just wondering what to expect for coding for 2012 and 2013 and how turning 59 1/2 would affect that in the IRS’s eyes.
Sorry if I offended anyone.
2012-01-18 00:33, By: John T., IP: [126.96.36.199]
L7: Age 59 1/2 question…….No problem. So your question really did involve a SEPP 72-T. But since the plan runs to the later of 5 years or 59 1/2, it really didn’t matter in your case since you started in July 2010, and your plan runs until July 2015. Your 1099-R may not have been
“coded wrong” for 2010. Most companies use a code 1 under all circumstances because they have no way of knowing what your “SEPP 72-T UNIVERSE” is, if you have other plans, or if you ever made “non-deductible” contributions. All that the code 1 means is that
you, or your tax preparer, have to spend an extra few seconds to generate a form 5329 with your tax return, and which will have n consequences as far as the IRS processing your tax return. It definitely will not cause an audit, no more than a code 2 will stoip
the IRS from asking for more information. In general, we all realize on this site that the IRS is clueless about SEPP 72-T plans. Just keep all of your documentation well organized. If you send copies with your tax return, IRS won’t read it, and will ignore
it.2012-01-18 00:49, By: dlzallestaxs, IP: [188.8.131.52]
L8: Age 59 1/2 question…….
Assuming your plan is valid:
1) If the 1099R is coded 1, then attach a 5329 showing exception code “02”
2) If the 1099R is coded 2 or 7, leave as is and do not file a 5329.
NOTE: If the custodian does not recognize the validity of your SEPP plan, they will generally code with a 1 prior to 59.5 and a 7 thereafter. If in the year you reach 59.5 you take distributions both before and after that date,
you can expect to get 2 1099R forms, and should file the 5329 only for the amount coded as 1.
The 5329 is used to either report a penalty when the coding indicates otherwise OR to report an exception to the penalty if the coding shown is “1”. If the code is 7, there is no penalty and no benefit to changing the reason
for no penalty on a 5329. Form 5329 is not designed to do this in any event.
2012-01-18 01:28, By: Alan S., IP: [184.108.40.206]