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When To File Form 4972. You can file Form 4972 with either an original or amended return. For an amended return, you must generally file within 3 years after the date the original return was filed or within 2 years after the date the tax was paid, whichever is later, to use any part of Form 4972.
Information about Form 4972, Tax on Lump-Sum Distributions, including recent updates, related forms and instructions on how to file. Use this form to figure the tax on a qualified lump-sum distribution using the 20% capital gain election, the 10-year tax option, or both.
You may be able to defer tax on all or part of a lump-sum distribution by requesting the payer to directly roll over the taxable portion into an individual retirement arrangement (IRA) or to an eligible retirement plan.
If you have a large retirement plan balance, taking a lump-sum could trigger significant tax consequences. However, IRS Form 4972 allows you to claim preferential tax treatment if you meet a series of special requirements. The biggest requirement is that you have to be born before January 2, 1936.
Form 4972 Tax on Lump-Sum Distributions A lump-sum distribution must be a total distribution, so the Form 1099-R provided by the payer needs to have box 2b Total distribution marked. Ideally the Form 1099-R would also have code A in box 7, but TurboTax does not require that.
Use distribution code A and answer all questions in the Form 4972 section (on Screen 1099R-2 for individual returns) to determine if the taxpayer qualifies for lump-sum averaging.
What is IRS Form 4972 used for? Taxpayers may use IRS Form 4972 to calculate the tax on a qualified lump sum distribution using the 20% capital gains election, 10-year tax election, or both. This option is only available for qualified plans where the participant was born before January 2, 1936.
Form 4972 is an IRS form with stipulated terms and conditions that is filled out to reduce the taxes that may be incurred on huge distribution amounts. The Buzzle article below explains the purpose of Form 4972, and the instructions to fill it.
The IRS has posted Form 4972, Tax on Lump-Sum Distributions, for tax year 2022. The form is used to take advantage of special grandfathered taxation options for certain individuals who were born on or before January 1, 1936.
The IRS has posted Form 4972, Tax on Lump-Sum Distributions, for tax year 2022. The form is used to take advantage of special grandfathered taxation options for certain individuals who were born on or before January 1, 1936.