Monthly or Annual Distributions
L1: Monthly or Annual DistributionsI plan to start my SEPP july 1st. I would like to take monthly dstributions. My question is if I take monthly distributions my first year and last year will be a lower amount on my tax return thus not showing equal distributions for eash of the five years. Will this flag a problem with the IRS? Or am I better to take an annual destribution on July 1 of each year so they will all be the same? I am just not sure if starting mid year will cause any problem.I like the monthly because it is more like getting a paycheck and easier for budgeting.I read somewhere that if you take monthly distributions the rate used is slightly lower. Is this correct?2009-04-03 10:27, By: Les, IP: [22.214.171.124]
L2: Monthly or Annual DistributionsStarting in July, you can either take 50% or 100% in the first year – the choice is yours. Without knowing an age, I can’t really tell you what your options are in the last yearsince I don’t know when the plan will end.
Will it create RED flags with the IRS? Probably not. You aren’t the first person to take a partial distribution in the first year.
Do not adjust the interest rate for a monthly distribution. Merely calculate the annual distribution and divide by 12 to get the monthly amount.
2009-04-03 12:15, By: Gfw, IP: [126.96.36.199]