SEPP Monthly Distributions
L1: SEPP Monthly Distributions
I plan to start a SEPP/72(t) distribution ASAP. I have done the calculations as to how much I should take in a year, but would prefer to distribute monthly. I have an immediate cash need and would like to take the November & December 2011 distributions
now, then start with equal distributions in January 2012. Does anyone know of issues with this?
2011-11-21 16:57, By: nrdinndorf, IP: [22.214.171.124]
L2: SEPP Monthly Distributions
If your “immediate cash need” is more than 2 month’s worth ( 2/12 of the annual distribution), and your tax situation will not be significantly affected negatively, you are alloweed to take the total annual distribution NOW, and then start monthly distributions
in January for 2012.
This might also be desireable if you could use the additional distribution in 2011 as a cushion for future years if an emergency need arose, so that you would not bust your plan at that time in the future, when you would be hit with a retroactive 10% penalty
on all cumulative distributions.
Also, you might not be able to get the paperwork completed to get your first distribution by 11/30, especially with Thanksgiving holiday this week. If your 1st distribution is taken in Dec, then your options are 1/12 or the full annual distribution.
2011-11-21 20:32, By: dlzallestaxes, IP: [126.96.36.199]