72t rule. How do you determine the account balance on which to calculate the SEPP?

Forum|Forum|4 years ago
March 4, 2022
2 replies
12 views

I have a client who rolled over their 401K upon retirement into multiple accounts with their financial advisor. For calculating the 72t SEPP payment can they only use 1 account vs the multiple account balances?

ProConnect Tax

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qbteachmt

Level 15

Was the SEPP already established, and if so, from which plan (401k?) or Account?

Start with this topic we covered it in Jan:

https://proconnect.intuit.com/community/proconnect-tax-discussions/discussion/ip-rolled-over-the-entire-federal-tsp-bal-to-a-rollover-ira-tp/01/186973#M18076

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qbteachmt

Level 15

"This gives some flexibility in adjusting the account balance by splitting or combining IRAs in advance to obtain the desired balance... It is permissible, however, to include more than one IRA balance in the initial payment calculation. Distributions must then come from one or both of these accounts. If a taxpayer needs additional distributions, establishing a SEPP from another IRA account while simultaneously continuing an existing SEPP is not prohibited."

Glad that link helped.

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A

AnmarieAAuthor

Level 5

Thanks as this helped greatly and now I have a better understanding of the 72t rule.

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