SEPP Penalty calculation

L1: SEPP Penalty calculationI need to bust my SEPP and would like to make sure I have calculated a correct penalty amount so I do not have a surprise come next April. I calculate a penalty amount of $1501.91. Here is a table showing the year, the amount of the SEPP withdrawal, the sum of the SEPP withdrawals, the 10% penalty calculated, the retro interest calculated, and the cost to bust:

Year
SEPP Withdrawal
Sum of SEPP W/d
10% Penalty
Retroactiv Interest
Total Cost to Bust

2005
3252
3252
325.2
29.27
354.47

2006
3045
6297
629.7
56.67
686.37

2007
2409
8706
870.6
78.35
948.95

2008
1048
9754
975.4
87.79
1063.19

2009
776
10530
1053
94.77
1147.77

2010
640
11170
1117
100.53
1217.53

2011
640
11810
1181
106.29
1287.29

2012
445
12255
1225.5
110.3
1335.80

2013
358
12613
1261.3
113.52
1374.82

2014
382
12995
1299.5
116.96
1416.46

2015
413
13408
1340.8
120.67
1461.47

2016
371
13779
1377.9
124.01
1501.91

I assume this penalty would not be paid until filing 2017 taxes.
Thanks,
Tim2017-06-07 17:42, By: TiminSWFL, IP: [184.7.130.244]

L2: SEPP Penalty calculationYes, the penalty would be reported on Form 5329 with your 2017 return. As for the interest portion, normally the taxpayer does not pay the late interest and waits for the IRS to bill it. They may not bill late interest or they may come up with a different amount. Of course, if you send in the interest as calculated, the IRS is more likely to accept your calculation and payment than to refigure the interest. You can therefore make your own choice on whether to include late interest or not. For year’s 2014-2017 it is possible that you might qualify for a different penalty exception than the SEPP exception, and you could amend your 2014-2016 returns to claim the different exception, which would eliminate the penalty for those years and the interest generated on the penalty for those years. There is FAQ posted on this site regarding how to report the busted SEPP and Form 5329. With your varying SEPP distributions over this period of time, you were apparently using the RMD method or a recalculated plan.2017-06-07 19:49, By: Alan S, IP: [174.126.90.174]

L3: SEPP Penalty calculationAlan is referring to the fact that there are several exceptions to the 10% penalty, other than the SEPP exception.2017-06-07 20:08, By: dlzallestaxes, IP: [173.75.240.211]

L3: SEPP Penalty calculationThanks Alan and dlz. Yes this was a recalculation plan. I have not taken out a 2017 withdrawal yet so I won’t to keep from increasing my penalty. What are the other potential exceptions for ’14-16?
Tim2017-06-10 13:38, By: TiminSWFL, IP: [184.7.130.244]

L4: SEPP Penalty calculationGo to irs.gov and then to form 5329 instructions.
Also, IRS Publication 575 and 721.
There are more than 10 exceptions.2017-06-10 14:40, By: dlzallestaxes, IP: [173.75.240.211]