Is this correct process to execute a SEPP?
L1: Is this correct process to execute a SEPP?Steps:1. Determine amount required annually.2. Run calculator to determine size of SEPP IRA to support annual disbursement.3. Isolate sufficient funds in SEPP IRA, move excess to non-SEPP IRA.4. Begin disbursements, monthly, quarterly or annually. Be sure that the annual amount disbursed is substantially the same each year.5. When filing federal taxes be sure to complete form 5329 to identify amount of disbursed funds that qualify for the SEPP exception.
Questions:Did I miss anything? Are there any other forms unique to SEPP that must be completed?thanks2008-08-11 14:08, By: Bob Mac, IP: [220.127.116.11]
L2: Is this correct process to execute a SEPP?Step 1 can be either of 2 approaches:
1. As you stated, determine how much you need, and then determine how much to segregate.
2. Many people are not fortunate enough to have IRA accounts larger than what they need for their SEPP. Those people would start with their IRA balance(s), and determine how much of an annual distribution the total of their IRA accounts will support based upon the calculation.
In addition, determine the amount you will need for the balance of the current calendar year, and then for each calendar year thereafter. The first calendar year you have an option to either take a portion of the annual amount (months left in current year/12) or you can take an entire year”s total even if you start in December.2008-08-11 15:07, By: dlzallestaxes, IP: [18.104.22.168]
L2: Is this correct process to execute a SEPP?Assuming I end the SEPP after 5 years, do I also have the option in the last year to take a prorated orfull year amount?2008-08-11 17:06, By: Bob Mac, IP: [22.214.171.124]
L2: Is this correct process to execute a SEPP?Assuming that you are over 59.5 at the end of 5-years, it can stop.Just remember that the 5 years is measuredfrom the date of the 1st distributionand ends 365 x 5 plus 2 days later. And,during that 5 year period you must have taken 5 full annual distributions.2008-08-11 17:15, By: Gfw, IP: [126.96.36.199]
L2: Is this correct process to execute a SEPP?Got it! Appreciate the quick responses to my question.thanks2008-08-11 18:05, By: Bob Mac, IP: [188.8.131.52]