Vangaurd brokerage account for SEPP
L1: Vangaurd brokerage account for SEPPI am planning on setting up an SEPP IRA at Vangaurd with a direct transfer (traditional-traditional), from my current financial institution. Eventually I also plan to transfer other SEPP’s and other types of IRA’s as well. Simply want to take personal control of my finances in retirement.
You recommend a brokerage account for SEPP’s. Other than access to additional investments is there a reason to do this if I would be happy with a handful of Vangaurd Index mutual funds in an investor mutual fund account?
Are the 1099’s handled differently for each account type? I have been getting separate 1099’s for each SEPP IRA Plan/account from my current financial institution.
I would like to understand how Vangaurd handles 1099’s for multiple IRA’s as I also plan to have additional ROTH and traditional IRA’s at Vangaurd and I would like to minimize red flags or problems with IRS.
2014-07-21 18:10, By: Mackster, IP: [184.108.40.206]
L2: Vangaurd brokerage account for SEPPVanguard, and all mutual funds or brokers, is required to send a separate 1099 for each different type of account (i.e. IRA, SEP-IRA, ROTH IRA, 401-K, etc.), as well as for each different account account number within each different type of account.
There is no need to use Vanguard Brokerage unless you want the flexibility in case you want to buy any specific stocks, corporate bonds, etc., in addition to or instaed of mutual funds at any time.2014-07-21 20:21, By: dlzalestaxes, IP: [220.127.116.11]
L3: Vangaurd brokerage account for SEPPSo a 1099 is sent for each typeof account, does that also mean each account number? If I have three SEPP Traditional IRA’s, another traditional IRA( not SEPP), and a ROTH IRA all with Vangaurd, 5 IRA’s total, will I receive 5 1099’s.
Sorry to be picky, just really want to know what to expect and don’t want to risk busting multiple SEPP’s.
regards-Mackster2014-07-22 01:48, By: Mackster, IP: [18.104.22.168]
L4: Vangaurd brokerage account for SEPPYES. 5 1099-R forms.2014-07-22 04:16, By: dlzallestaxes, IP: [22.214.171.124]
L5: Vangaurd brokerage account for SEPPHaving 4 separate and independent SEPP plans is extremely rare, in fact I cannot recall anyone posting here that had as many plans. With the separate 1099R forms, the IRS cannot tell if you are maintaining one plan using 4 IRA accounts, 2 plans using 2, 3 plans using two and one plan using one etc etc. And they are unlikely to go back to your first year and try to figure it out, so at some point they could inquire and ask for all your documentation. Nothing wrong with having 4 plans, but having the IRS inquire about them raises the risk they might discover something wrong with one of them. The good news is that an error in one plan will bust only that one plan and not the rest. And while filing a 5329 is not a red flag, if you have 4 SEPP plans and need to file a 5329 for all of them at VG, the IRS may be more likely to inquire than if the exception code 2 was granted by a different custodian on all of the 1099R forms.
I think the number of plans is more of an exposure than minor differences in the calculation due to interest rates/payout patterns. Cannot recall a case where the IRS has busted a plan for those minor differences in payouts as long as the same amount is distributed every year. ButI would try to restrict the number of additional plans you initiate from here.2014-07-22 18:59, By: Alan S, IP: [126.96.36.199]