Old client now NRF, called to say she did not take out the full amount of Minimum Distribution. According to TTB and others the fix is to fill out the 5329, pay the tax, and write a letter.
I advised the client to immediately withdraw the extra amount, come in to see me if she needed help with the 5329 (which no doubt she will), and be prepared to pay the tax and wait for it to be paid back.
Can you see anything I am missing? Do you think a handwritten letter by the client would be better than something from me?
Can you understand why the brokerage let her down? Since she no longer files, I do not have the access to the 12/31 amounts to tell her how much to take out. She was relying on the broker.
I think, if she comes in for help, I will offer to do a review each year and ask for the 12/31 report for the previous year, give her a CFS worksheet on how much to take out, call the broker as to how much she has taken out for a tax prep fee. How does that sound?
I advised the client to immediately withdraw the extra amount, come in to see me if she needed help with the 5329 (which no doubt she will), and be prepared to pay the tax and wait for it to be paid back.
Can you see anything I am missing? Do you think a handwritten letter by the client would be better than something from me?
Can you understand why the brokerage let her down? Since she no longer files, I do not have the access to the 12/31 amounts to tell her how much to take out. She was relying on the broker.
I think, if she comes in for help, I will offer to do a review each year and ask for the 12/31 report for the previous year, give her a CFS worksheet on how much to take out, call the broker as to how much she has taken out for a tax prep fee. How does that sound?
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