July 1, 1946 Birthday

[RitaB]

Did client with DOB 7/1/1946 reach age 70.5 in 2016?  He thinks he was 70.5 on 1/1/2017.  I think he was 70.5 on 12/31/16, and he has missed his RMD.  7/1/2016 was the 183rd day of 2016 and there were 183 days left in the year.

If I'm right, should I just finish up this return and get it filed, have him take the RMD ASAP,  and do the begging with Form 5329 as soon as I can get to it? 

[Richcpaman]

I would go with his age calculation.  I think somewhere, in the Social Security rules, they count the first day of the new year as the last day of the previous year.

If they send a letter, I would use his argument.  He has reasonable basis.

Rich

[RitaB]

11 minutes ago, Richcpaman said:

I would go with his age calculation.  I think somewhere, in the Social Security rules, they count the first day of the new year as the last day of the previous year.

If they send a letter, I would use his argument.  He has reasonable basis.

Rich

Yes, I remember thinking that they call Jan 01 the last day of the prior year.  He still missed the RMD though, right?  Because 1/1/2017 would count as turning 70.5 in 2016.

 

[jklcpa]

18 minutes ago, RitaB said:

Did client with DOB 7/1/1946 reach age 70.5 in 2016?  He thinks he was 70.5 on 1/1/2017.  I think he was 70.5 on 12/31/16, and he has missed his RMD.  7/1/2016 was the 183rd day of 2016 and there were 183 days left in the year.

If I'm right, should I just finish up this return and get it filed, have him take the RMD ASAP,  and do the begging with Form 5329 as soon as I can get to it? 

From this IRS page https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-required-minimum-distributions-rmds

Quote

Date that you turn 70½

You reach age 70½ on the date that is 6 calendar months after your 70th birthday.

Example: You are retired and your 70th birthday was June 30, 2013. You reached age 70½ on December 30, 2013. You must take your first RMD (for 2013) by April 1, 2014.

Example: You are retired and your 70th birthday was July 1, 2013. You reached age 70½ on January 1, 2014. You do not have an RMD for 2013. You must take your first RMD (for 2014) by April 1, 2015.

 

[Richcpaman]

1 minute ago, jklcpa said:

From this IRS page https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-required-minimum-distributions-rmds

 

Judy is awesome.  *I* am lazy...

Rich

[RitaB]

Ok, thank God.  And Judy and Rich.  Let's stop while I'm ahead.  I've still not had a nap...

 

[jklcpa]

Nah, I started to look for a cite, got frustrated & just googled.

I'm operating on 4 hours of sleep thanks to my computer's clock thinking that yesterday was the end of DST. It was wrong yesterday morning and into the afternoon so I changed the time. Then sometime in the wee hours when I was engrossed in a return, it compounded the problem by trying to fix itself on top of my intervention. When I thought it was time for the dog's last medication, I strolled out to the kitchen and discovered it was actually 3:15 a.m. Adding to that was an early first appointment with a client that annoyingly shows up very, very early for appts, like 45 mins early when I was still in the shower the last time. 

[RitaB]

You know clients who show up 45 minutes early to appointments?  It's ok to kill those clients.

 

[Lion EA]

I'm bringing a list of names with me to Rita's this summer.

[Richcpaman]

12 hours ago, RitaB said:

You know clients who show up 45 minutes early to appointments?  It's ok to kill those clients.

 

Its ok to make them wait as well.   5 or ten minutes early, ok... but 45?  You can wait.

[grandmabee]

20 hours ago, Richcpaman said:

I would go with his age calculation.  I think somewhere, in the Social Security rules, they count the first day of the new year as the last day of the previous year.

If they send a letter, I would use his argument.  He has reasonable basis.

Rich

So if taxpayer dies on 01/01/2018 can a joint return be filed for 2018 assuming wife does NOT remarry?  or is that just for Social Security.

[jklcpa]

48 minutes ago, grandmabee said:

So if taxpayer dies on 01/01/2018 can a joint return be filed for 2018 assuming wife does NOT remarry?  or is that just for Social Security.

Yes, if one of the parties in the couple dies during the year, no matter if it was on 1/1 or 12/31, that person was alive during that tax year and died during that tax year, so a joint return is correct as long as the survivor does not remarry.

I've never heard of the rule Rich mentioned about social security using 12/31 for someone dying on 1/1, and I don't have time to search through the maze of rules on SSA's site right now. If anyone knows, please chime in.  We all know that benefits paid in a month are really for the previous month, provided that the person lived every day of that preceding month. So if someone dies on 1/20, the person is not eligible for the benefits that *might* be paid in Feb.  If that payment is received, it must be paid back.  Sometimes SSA doesn't get the payment shut off in time, especially if someone dies late in a month.  But I don't think this is what Rich was referring to.

[Bart]

My fathers date of birth was January 1st.  Only thing I know about that was he was considered to have turned sixty five on December 31 of the previous year instead of the January 1 he really turned. 

[jklcpa]

1 hour ago, Bart said:

My fathers date of birth was January 1st.  Only thing I know about that was he was considered to have turned sixty five on December 31 of the previous year instead of the January 1 he really turned. 

Interesting, and thanks!  That kind of makes sense since he was born on a holiday, so they gave him the day earlier to make sure he wasn't harmed by the system making an erroneous calculation. Maybe that is what Rich remember too. 

[Bart]

1 hour ago, jklcpa said:

Interesting, and thanks!  That kind of makes sense since he was born on a holiday, so they gave him the day earlier to make sure he wasn't harmed by the system making an erroneous calculation. Maybe that is what Rich remember too. 

I always thought it was because his parents lost out on the personal exemption by a few hours in the beginning so they gave it back to him at the end.

[Catherine]

My grandfather was born on December 31st, and for him it meant he had to go fight in WW1 a year early; they called up the young men born in his year in Italy.  For warm winter socks, they were given double-pointed knitting needles and wool yarn.