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Starting SEPP in December

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Last Updated On
Byold grandad

L1: Starting SEPP in DecemberI am ready to begin a 72t from Vanguard. I would like to take an annual amount, and have done all the calculations thanks to your website (thanks!). If I begin in December and get an annual payment, does that cause a problem? It is my understanding that the1099 from Vanguardwill show the annual payment amount and that is to go on form 5329, but will the IRS question a year’s payment when starting in the last month of the year?2008-12-10 13:57, By: old grandad, IP: [64.12.116.131]
L2: Starting SEPP in DecemberIf you have everything set up with Vanguard then go ahead and notify them to make the annual distribution amount in December. Making annual distributions will make life simple for you when it comes to tax reporting, but it may complicate your life from a cash flow stand point.Jim2008-12-10 14:08, By: Jim, IP: [70.167.81.119]

L2: Starting SEPP in DecemberThanks Jim,I was thinking that getting 12 months worth of distribution in one month (of 08) would be an issue, but I suppose it’s only an issue if I need to explain it to the IRS later on. :-)2008-12-10 14:12, By: old grandad, IP: [64.12.116.131]

L2: Starting SEPP in DecemberThere should be no problem as long as you take either one month or one year. IRC section 72(t) talks about annual payments aqnd doesn’t state that it needs to be taken on January 1. Remember, the IRS only knows the amount received, not when it was received. 2008-12-10 14:12, By: Gfw, IP: [98.214.144.242]

L2: Starting SEPP in DecemberRegardless whether you take a full annual distribution or 1/12 of it in Dec. 2008, you can change your distribution frequency for 2009 in January, or at any othet thime in 2009, or any future year, so long as you take the correct total for any year.2008-12-10 14:29, By: dlzallestaxes, IP: [96.245.168.66]

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