My client turned 72 in October but took his first RMD in Feburary 2023. Do I have to fill out form 5329 for a waiver?

[utah-arizona-taxlady]

This is the first time I have had to deal with this in 30 years.  I know it is allowed the year a taxpayer turns 72 to take it out before April 1 the following year, but I'm not sure if I need to let the IRS know with form 5329 and ask for a waiver?  Or do they just look next year to make sure he has taken two.  To make things more complicated, he took it from a different IRA company, which is also allowed.  (And a note, he most likely will not be filing next year, the only reason he is filing this year is he didn't stop his withholding until May of 2022 and wants it back.) 

[IRonMaN · Accepted solution]

You have until April 1st so no waiver would be needed.

[qbteachmt]

"Or do they just look next year to make sure he has taken two."

Not next year; this year (2023). In 2022, your taxpayer met the RMD requirement and took it by the due date. In 2023, they take an RMD. From now on, every year, they take an RMD. There is no more waiting to the tax filing due date.

And since he took the 2022 in 2023, only 2023 will have 2.

[qbteachmt]

"(And a note, he most likely will not be filing next year,"

What about the RMD? That typically is taxable, at least partially.

[IRonMaN]

But I think the last time I checked February 2023 wasn't in 2022 😉

[qbteachmt]

Corrected my reply. For some reason, I got stuck on Oct 2022 as the taking event.

I have a client I have guided for a few years, turned 72 Jan 2023. I keep stating, "Okay, next year you'll take your RMD." And, of course, the 70 1/2 got delayed; then the 72 got delayed. They think I'm not very good at what I do...

[utah-arizona-taxlady]

No problem with doubling up on the RMD for 2023.  Total income between both spouses will be less than $10K plus SS.

[rbynaker]

@utah-arizona-taxlady 

Sounds like what I would call a "nuisance" IRA.  If the RMDs are that low it's probably not worth keeping open.  Maybe do partial conversions to Roth or take more than just the RMD each year to make use of the full standard deduction.

I'm hoping to visit Southern Utah in the Fall.  I've been to SLC but not to any of the parks between there and the Grand Canyon.  We'll probably fly into Vegas and rent a car from there.  I've met a half-dozen or so folks from this community over the past several years of travel.  I'd love to add you to the list!  Email me if you're interested so I'll have your contact info when I start planning.  I'm pretty easy to find on the Internet.

Rick

[IRonMaN]

For the sake of full disclosure, there are currently a half dozen or so unsolved missing person cases in the areas he has vacationed in.  😜

[rbynaker]

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@IRonMaN wrote:

For the sake of full disclosure, there are currently a half dozen or so unsolved missing person cases in the areas he has vacationed in.  😜

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So far they haven't been able to prove anything . . .  And at least one of those people retired and moved. 🙂

[utah-arizona-taxlady]

Rick,

I now live in Arizona between Phoenix and Flagstaff, near Prescott.  I lived in Utah most of my adult life, went to college in St George Utah (south) and Ogden Utah, north.  I am very familiar with the area.  I looked you up online, I lived in your neck of the woods from 5th thru 8th grade.  My dad was at the Pentagon.  I went to Kings Park Elementary (off Braddock Road) and Robert Frost Junior High (right next to Woodson High School).  I assume you will know about where these are. 

I agree with what you said about my clients IRA and RMD but he wants it to last as long as possible....so I have no say.  He knows what is best ya know....

And as for the missing people.  I won't tell anyone....I promise!  LOL

Janis

[rbynaker]

Small world.  My mom worked for Fairfax County Public Schools for a while.

There's a chance we'll spend the night in Williams, AZ.  Still way too early to know but my current thinking is to go from Vegas to see the South Rim (I've seen South Rim before but Cheryl hasn't).  Depends a lot on flight schedules.  Vegas to Williams is about 250mi.  Then we'd loop around through Four Corners, maybe a bit of Colorado before cutting back across Utah for Arches, Canyonlands, Capitol Reef, Bryce and Zion.  Then hit North Rim on the way back to Vegas.  Time permitting we might sneak over to Great Basin or even Death Valley.  But I think that's way more trip than we have time for!

[qbteachmt]

"But I think that's way more trip than we have time for!"

Nah. You stated "Fall" and three months is just about right to cover all of that. You'll be fine.

Honestly, the best bang for your buck that you'll never forget: one of those sightseeing overflights, such as out of Moab. Makes all the interim driving worth it.

[utah-arizona-taxlady]

Rick, The Best Western Inn of Williams is a really nice place to stay.  Williams is a wonderful place.  You can take the Grand Canyon Railway to the South Rim if you are tired of driving.  It's unique and you get robbed on the way home!  hahaha  I'm about an hour and half from Williams.  Love the little town!  I'll look for your email online when I have a minute and give you the name of a few places. 

And yes, Moab, Utah is a beautiful place, especially if you do any off roading.  And if you have never seen Sedona, AZ....well it is breathtaking!  You may need to take a couple of months!   This is one small

Janis