Error in 72T Account Balance
L1: Error in 72T Account Balance
DOB 9/1/62 starting my plan March of 2018. I was reviewing my paperwork at the end of year and uncovered, to my dismay, that I made an error in the calculation for the 72T IRA Account Balance. I split my IRA accounts to keep one account outside of the 72T realm. In the process of doing so, I made an error in the amount of $5,863.25 in the remaining 72T account. To be precise, I based my annual payments on an account balance of $798,566.78 instead of the correct amount of $804,429.62. I am using the Amoritization method with a rate of 2.78 (February of 2018). Is there anything I can do to correct this or is my plan busted? If my plan is busted, do I report this now to avoid further penalties.
Thank you in advance for your assistance.
2018-12-31 20:23, By: chelroe, IP: [2602:304:cdd8:4fc0:990a:b9f5:d457:b67e]
L2: Error in 72T Account Balance
Since you took distributions based on a lower amount of $798k rather than $804k, you effectively took less than you were entitled to take. This is OK because the 2.79% interest rate is the
maximum allowed. You are allowed to take a lower interest rate, and there would be a lower interest rate calculated against the $804k that equals the distribution you actually made this year. Figure out what that interest rate is (for audit purposes, which audit may never come). The following years’ distributions should be the same as this year.
2018-12-31 20:31, By: sm69, IP: [2600:387:6:805::6b]