Readers’ Q & A

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I discovered in 2014 that I forgot to take out my required IRA distribution.  How much trouble am I in?

The required distribution is often called a “Required Minimum Distribution” (RMD).  If you missed a RMD and do nothing, the penalty is 50 percent of the amount of the IRA distribution.

The good news is you can ask the IRS to waive the penalty tax by filing Form 5329.  Include a reasonable explanation for the oversight.  I would recommend that you correct the error and mention on Form 5329 that you did correct it as soon as you discovered it.

My experience is that the IRS consistently waives the penalty.


Can I claim a child care credit if I pay a relative who lives with me to take care of children?

Maybe.  Assuming you meet all the other requirements, you can claim the dependent care credit (often called the Child Care Credit”) for expenses paid to a relative.

If the relative is your spouse, another of your children under the age of 19, the child’s parents, or any other person whom you or your spouse can claim as a dependency exemption, then you are not eligible to take the credit.

It doesn’t matter whether or not the caregiver lives with you.