馃攳
CARES Act Retirement Distributions: Reporting Form 8915-F 2021 from 2020 IRS Form 8915-E - YouTube
Channel: JJ THE CPA
[0]
jj the cpa here hope you're doing well
[2]
so
[3]
if you in 2020
[5]
took money from retirement
[8]
under the cares act exception where you
[10]
could pull up to a hundred thousand out
[12]
per person
[13]
and potentially not pay tax on it
[16]
immediately or repay it
[18]
this video is for you so this was not
[20]
possible in 21 the only the only way
[23]
that this video applies to you
[25]
is if in 2020 you pulled money out of
[29]
retirement and now you have further
[31]
reporting to do
[33]
so with that being said it's form 89
[37]
15-e
[38]
that in essence governs this for lack of
[41]
a better word
[42]
so if you're preparing a return for
[44]
somebody that's a new client or you're
[46]
looking in the own return your own
[48]
return
[49]
go and find in the 2020 tax return form
[53]
8915e and i'll give you a link to that
[56]
as well as the instructions but the
[58]
thing i wanted you to know is that in 21
[60]
and 22
[62]
if you elected which will be on form 89
[65]
15 e it'll indicate what you elected and
[68]
there's no change in it now you're stuck
[70]
with whatever it was but if you took the
[72]
option to recognize a third of the
[75]
distribution in 2020 a third and 21 and
[79]
a third and 22 that's what you have to
[81]
do you don't get to choose any other
[82]
methodology the only way you choose
[85]
something different is you go back and
[86]
report it all in 2020 and pay penalties
[89]
and interest on any tax due there would
[91]
be no reason to do that
[92]
but you don't get to recognize more than
[94]
a third or less than the third in 21 or
[97]
in 22 it's a third third a third
[99]
now the thing to note is that in 21 and
[101]
22 that's considered in essence
[104]
still
[105]
a
[107]
retirement withdrawal distribution
[109]
that's taxable but it's not subject to
[111]
the 10 percent early distribution
[113]
penalty and it's not subject to the 25
[116]
early distribution penalty if it came
[118]
from a simple not
[119]
at all subject to
[121]
the penalties
[123]
and then you're picking that up as
[124]
income and you're paying tax on it now
[126]
there couldn't have been any tax
[127]
withheld
[129]
towards 21 so there's going to be tax
[131]
due on that if you have tax due in 21
[134]
meaning you're writing a check come
[135]
april or whenever you file your return
[138]
then what you might consider for 2022
[140]
knowing that you're gonna have to pick
[141]
up a third in 2022 paying in estimated
[145]
tax payments
[146]
or increasing your withholdings talk to
[148]
your tax pro about that because if you
[150]
owe more than a thousand dollars come
[152]
tax time
[154]
well you're gonna then have some
[156]
penalties and interest on top of that
[157]
some underpayment penalties and interest
[160]
right now what i want you to know is
[162]
that you are picking up a third this
[163]
year if you picked up a third in 2020
[165]
but it's not subject to the early
[167]
distribution penalties now if you took
[169]
the option
[170]
of repaying it
[172]
so
[173]
you can either repay it all
[175]
you can repay it early but you at least
[178]
have to have paid one-third back within
[180]
12 months of your distribution and if
[182]
you took multiple distributions pretty
[184]
much it's
[185]
12 months from the first distribution
[187]
did you pay back a third of what you
[189]
pulled back now pulled out
[192]
and then you need to pay the next
[194]
third within 24 months of the first
[197]
distribution
[198]
and then you have to pay the last third
[201]
within 36 months of the first
[204]
distribution
[205]
repayment has nothing to do with the due
[207]
date of a tax return repayment has to do
[211]
with the date that you took the
[213]
distribution now if you don't pay back
[217]
within 24 months the second installment
[220]
which is one-third
[222]
then the whole thing collapses and you
[224]
have to go back to 2020 and you have to
[226]
report the income that you did not pay
[229]
back you don't get to then report some
[231]
of it in 21 that you didn't pay back and
[234]
some of it in 22.
[235]
on the repayment if you default meaning
[238]
you don't pay it back or whatever
[239]
portion you don't pay back timely you
[242]
have to go back it's your only choice
[244]
you have to go back and amend 2020 and
[246]
pay the tax the penalties and the
[248]
interest now of course you could pay it
[250]
early because all they say is you got to
[252]
pay all of it
[253]
within 36 months with one third due in
[256]
12 months two-thirds due
[258]
in 24 months and then all of it due
[260]
within 36 a third third third but my
[262]
point is you can pay back early they're
[264]
not going to care about that but you at
[266]
least have to pay back within 24 months
[269]
related to your 2021 return
[271]
the one-third that you indicated so
[274]
check out form 8915e
[277]
and the instructions related to that
[279]
giving you a link to it and
[281]
this isn't anything of money that you
[283]
pulled out in 21 if you pulled money out
[285]
in 21 none of this applies to that none
[289]
of the options to repay it repay a third
[292]
or third third blah blah blah none of
[295]
that counts it's only for distributions
[298]
that were in 2020 that were due to covet
[302]
and meet the definition so it already
[304]
happened i mean you either did or you
[306]
didn't have that
[307]
and that's why i indicated for you to
[308]
look for that form 89 15e all right hey
[311]
thanks for tuning in i'd love it if
[313]
you'd subscribe and then don't you ever
[315]
forget you've never met a cpa quite like
[318]
me have a great one
[320]
[Music]
[333]
[Music]
[337]
met ah never met her
[339]
cpa quite like kk
Most Recent Videos:
You can go back to the homepage right here: Homepage