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My client did not take his 401K RMD in 2018 and just discovered this. Does he contact the financial distributor and take the RMD now and it is filed with 2019 return. Or do we file an amended 2018 return to include the RMD for his 2018 RMD on the 401K.
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Take the 2018 ASAP and be sure to also get the 2019 this year. This will result in both being taxed in 2019. There is a penalty for not taking the RMD, so you should file a 5329 for 2018. You can request a waiver of the penalty. https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-required-minimum-distributions#...
The 5329 can be filed all by itself. There is signature area on page 2, so it can be completed and mailed with either payment or waiver request.
Answers are easy. Questions are hard!
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Do what George says and especially emphasize the the error was corrected as soon as it was noticed and that measures have been put into place to make sure the mistake doesn't happen again.
BUT I would NOT pay the penalty. The IRS has historically waived it. And it is much easier to get someone to just say "sure, waive it" than it is to find someone to cut a check to refund the payment.
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Thank you for your assistance. I will inform him to contact the financial institution and request the RMD for both 2018 and 2019. I will then file form 5329 requesting a waiver for the 2018 RMD.
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And do it NOW....
I have had issues with some financial institutions thinking this is way too late in the year to actually process the request.
And YVW
