Common use of Qualifying Trusts Clause in Contracts

Qualifying Trusts. If you name a qualifying trust, which is defined waive withholding or elect to have greater than 10 percent withheld. in Treasury Regulations, as your SIMPLE IRA beneficiary, the Annual Statements. Each year we will furnish you and the IRS with excise tax applies each year that the excess contribution remains in statements reflecting the activity in your SIMPLE IRA. You and the IRS your SIMPLE IRA. will receive IRS Forms 5498, IRA Contribution Information, and 1099-R, In order for you to avoid a 6 percent excess contribution penalty, Distributions From Pensions, Annuities, Retirement or Profit-Sharing excess contributions may generally be removed with earnings by Plans, IRAs, Insurance Contracts, etc. IRS Form 5498 or an appropriate your tax-filing due date, including extensions. If you timely file your substitute indicates the fair market value of the account, including federal income tax return, you may still be able to remove your SIMPLE IRA contributions, for the year. IRS Form 1099-R reflects your excess contribution, plus attributable earnings, as late as October 15 SIMPLE IRA distributions for the year. for calendar year filers. Excess contributions are generally included By January 31 of each year, you will receive a report of your fair in your income. Your SIMPLE IRA excesses cannot be market value as of the previous calendar year end. If applicable, you will recharacterized and cannot be used as a traditional IRA contribution. also receive a report concerning your annual RMD. Your employer should inform you when an excess contribution has Federal Tax Penalties and IRS Form 5329. Several tax penalties may occurred along with the steps needed to correct it, including its use apply to your various SIMPLE IRA transactions, and are in addition to of the EPCRS. any federal, state or local taxes. Federal penalties and excise taxes are 3. Excess Accumulation Penalty Tax. Any portion of an RMD that is generally reported and remitted to the IRS by completing IRS Form 5329, not distributed by its deadline is subject to an excess accumulation Additional Taxes on Qualified Plans (Including IRAs) and Other penalty tax of up to 25 percent. The IRS may waive this penalty Tax-Favored Accounts, and attaching the form to your federal income tax upon your proof of reasonable error and that reasonable steps were return. The penalties may include any of the following taxes: taken to correct the error, including remedying the shortfall. See