SEPP and the mid term rates
L1: SEPP and the mid term ratesDoes a SEPP need to be recalculated every time the mid term rate changes? or does the rate at the time the SEPP was started apply for the life of the SEPP? I intend on a single annual disbursement each year until I attain 59 1/2 for ease of accounting. I just want to avoid a hassle from the IRS.2010-12-01 19:06, By: Brad, IP: [126.96.36.199]
L2: SEPP and the mid term rates, the initial rate determines the annual distribution. They stay fixed for the life of the SEPP 72-T, unless you make the one-time change in method.
I do not see how taking one annual payment is any different from accounting for 12 monthly payments of the same amounts which total the same as the annual distribution. For tax purposes you will report the same figure, and it will be the same figuure reported on the 1099-R. You are right that you do not have to spend 10 seconds every month to make sure the payment was automatically made every month. However, taking payments once a year requires even more accounting to budget your expenditures for the rest of the year.2010-12-02 00:52, By: dlzallestaxes, IP: [188.8.131.52]