missed RMD
A new client missed her 2018 RMD distribution. I’ve completed Form 5329 per your April newsletter recommendations and intend to file the return electronically via TaxAct professional software. However, I don’t see how I can write “RC” on line 54. I did compose a statement to explain relevant details. My questions are: how critical is the “RC”, and does the client need to sign the statement if the return is filed electronically? I did refer to Reasonable Cause on the statement. Thanks for your help.
Permalink Submitted by Alan - IRA critic on Mon, 2019-10-07 02:15
Odd that professional software would not provide for the “RC”. Are you sure? While not ideal, the explanatory statement will likely suffice, along with entering the amount of the RMD to be waived on 54 and subtracted out resulting in 0 on the actual line 54. 55 will also be 0. The IRS should accept that without a signature unless you are filing the 5329 alone.
Permalink Submitted by Diane Ouellette on Mon, 2019-10-07 16:57
I will contact support for TaxAct re the RC issue, but I did show 0 on both lines 54 and 55, very helpful instructions in the April newsletter. Thanks for your response.
Permalink Submitted by David Mertz on Mon, 2019-10-07 12:46
If the software does not provide for including “RC” on line 54, which seems unlikely, it would probably also not be able to show next to line 54 the amount on which the waiver is being requested and reduce the amount on line 54 accordingly. See if this TaxAct page provides the necessary instructions: https://www.taxact.com/support/13807/2018/ira-rmd-required-minimum-distribution