Rounding on calculator/ Distributions-Dates and La

L1: Rounding on calculator/ Distributions-Dates and LaThe 72Tcalculation which I intend to utilizerounded the annualamount shown in your annual payment grid, while also providing an exact amount, to the penny, shown above the grid. I gather my using the rounded amount, (Rounded up),iswithin the guidelines, as I willtake the distribution in asingle annual installment and it is within $1. What is your advice on this?
From what I have read, am I correct that I can take the one time annual distribution at anydate of the year, for example this month?
My 59.5 month is mid 2013, and the calculator shows my yearly distributions running through 2012. If I take another distribution in 2013 on or prior to my 59.5 date, I am interpreting that the amount would still be the annual SEPP amount and if after I can take any amount. Am I right and what if I choose to do both in my 59.5 year, does that have any negativeimpact?
Thanks,
Bob
2008-01-07 07:01, By: car-tows, IP: [72.86.12.216]

L2: Rounding on calculator/ Distributions-Dates and LaHello car-tows:
Any amount, either truncated or rounded that is within $1.00 is okay as all pennies are considered to be de minimus.
You may take your annual distribution on any day in calendar 2008.
Assuning your 59 1/2 bithday is 7/1/2013, come 2013, you actually have three choices: (1) distribute nothing between 1/1/13 and 7/1/13; (2) distribute the prorata amount, in my example 50% of your annual distribution; (3) distribute the full annual amount between 1/1/13 and 7/1/13. Commencing 7/2/13 you are free to distribute whatever & whenver you choose irrespective of your choice for the period 1/1/13 to 7/1/13.
TheBadger
wjstecker@wispertel.net

2008-01-07 07:11, By: TheBadger, IP: [72.42.66.180]

L2: Rounding on calculator/ Distributions-Dates and LaTheBadger,
Thanks for you reply. I would appreciateyour clarification on the following:
When I utilized the Last Payment Date calculator, it indicated Jan. 9 2013, as the final date, while the SEPP calculator provided distributions through 2012. In your reply, a 2013 SEPP distribution was not required. What does this last date mean?
In 2013, for tax reporting, if I take a SEPP distribution pre-59.5 and a normal one post 59.5, should the trustee provide two distinct 1099”s, with respective codes for each?
Thanks, Bob2008-01-07 08:25, By: car-tows, IP: [72.86.12.216]

L2: Rounding on calculator/ Distributions-Dates and LaThe calculator on the site deals in whole years and as a result uses the last year shows as 2013. If this is the year that you turn age 59.5 and the five year rule has already been met, you have options other than taking the full payment.
The date given by the last payment date calculator gives the first date on which the plan may be modified. After that date, there could be additional distributions, etc. that were not defined by the plan.
In the last year you may (or may not) get 2 1099s -if not, you may have to claim the exemption for the SEPP portion on 5429.
Hope this helps.2008-01-07 09:13, By: Gfw, IP: [74.136.102.241]

L2: Rounding on calculator/ Distributions-Dates and LaIt”s somewhat tough to predict 1099R procedures 5 years out, when many custodians are altering their treatment of 72t plans on the fly, and/or changing firms that handle the reporting. It is also quite possible the IRS itself may tire of the current lack of consistency on this subject and wield some clout to bring firms back in line with the original 1099R coding intent. So you will have to stay flexible and keep your 5329 instructions handy.2008-01-07 10:39, By: Alan S., IP: [24.116.165.60]

L2: Rounding on calculator/ Distributions-Dates and LaHello, C-T:
We”ve always used the round up at $0.50 and round down at $0.49 technique on our tax forms, reporting only whole dollar increments. Never had any comment from the IRS on this so it must be OK with them.
I asked vanguard about distributions under SEPP and what happens in the final year of the SEPP where there are both pre and post 59.5 distributions and also in the year when there are pre and post end of SEPP distributions. They replied that they issue 1099Rs with a coding of “1” and that they will not issue a 2nd 1099R in the year that the SEPP ends or when age 59.5 arrives. Apparently, Vanguard is doing its best to ignore the SEPPs of their clients in spite of the fact that a multi-page form is required, much info is collected by them, and they are paying regular IRA distributions in a fixed amount.
I”m 58 now and have had a SEPP for just over 2.5 years. I don”t know what they will code my 1099R as in 2009 when I turn 59.5 in Feb., so am waiting to see what happens there. It is clear that different custodians have different in-house rules on how to handle these questions. As Alan said above, perhaps the IRS will tire of all this and demand a return to the original 1099R coding intent. Until then, we seem to be stuck with multiple custodian interpretations of the IRS code rules. Although I may be a bit cynical in this, my guess is that my SEPP will end in March of 2010 with this issue unresolved.
Ed_B2008-01-16 15:49, By: Ed_B, IP: [67.170.159.37]