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I would not bother amending. If under examination, just explain how it was reported (cash basis). IMO amending while under examination just makes it worse.

And this is a strategy that you should review with your accountant or financial advisor, if you have either, for any unforeseen "gotchas" or missed pieces as Lou noted. If you are using this strategy to help delay taking SS, then that piece won't yet be an issue. Minimizing taxes is good but can you live on $100k per year (and pay for all you need, like healthcare, and all you want, like vacations) and how will that depletion compare to your joint life expectancies? Will you run out of money early or have large RMDs at age 72 that trigger large tax bills? You shouldn't view retirement income in the tax vacuum. If I could take $200k in retirement income less $40k in taxes, knowing it would last my retirement and I could live the life I wanted, or opt to take $100k in annual income, outsmarting the government paying zero taxes as long as possible, but having to scrimp and sacrifice throughout the earliest and healthiest years of my retirement, I choose the former every time. Sounds like your retirement funds are well diversified from a tax perspective. I would recommend, if you don't already have an advisor, find a reputable fee for service provider and pay for qualified advice that will help you map out a long term retirement income strategy that efficiently minimizes taxes (does not mean eliminate) throughout your joint life expectancies. There are very smart people on this forum but I would not seek free advice and confirmation of my complex retirement income situation here or any other on-line forum.

If the employee turned 70.5 in 2020, then their RBD is 4/1 following the year they turn 72, under the SECURE Act.

Kind of in Belgarath's court here, the only possible damages incurred would be related to being under withheld on state taxes. I think they would have to have had substantial distributions for that to be the case. The obvious question/issue - and one I would make were I the carrier (not that I excuse them for poor service) - is how/why did the recipients only "discover" this only when getting their 1099? That is total BS. If I'm expecting a $10,000 payout and I know that 20% must be withheld for Federal taxes AND I ELECTED ANOTHER 10% (hello, McFly), then I'm also smart enough (I hope) to know that I should be getting a check for $7,000 and realize that something isn't quite right when they send me $8,000. This lack of personal responsibility drives me nuts - like when a person elects a salary REDUCTION contribution but then doesn't notice (for a whole year even - c'mon McFly!) that their weekly (or whatever) pay did not go down. Anyway, done pontificating, go 'Cuse, in the Sweet 16 baby!

Glad to know we are not the only ones who are frustrated, but sorry we are all in this boat! If we didn't have their entire suite with Datair- administration, forms, and documents - we would probably be shopping too. Their total lack of consideration to their clients is basically going to force all of us to do what used to be two years of work (each previous restatement cycle) in one year. If their new document was available tomorrow, there's a learning curve in all organizations where the new document has to be read, discussed, and digested before one can run out and start applying it to clients. Plus they ALL have bugs in the beginning, no matter the source of your documents. So one must allow x amount of time for those activities before the "real work" can even begin. Not Happy!

Typically a 401(k) election that is expressed as a percentage will be applied to gross pay (before taxes, medical premiums, or other deductions or withholdings). That is a general trend, but not a rule, so you should confirm with your wife's employer. Most 401(k) plans will allow you to make an election as a dollar amount per pay period, instead of a percentage of pay. If your goal is to defer the annual maximum it might be more practical to do it that way, so you would not have to worry about periodic fluctuations in her pay. You will also need to ask them what they do if her gross pay is not enough to support her elected 401(k) amount after tax withholding, medical premiums, and any other deductions. They might do the maximum, they might do nothing, or they might have some other procedure. Again there is no universal rule on this, but they should have an established procedure in place.

Did you miss the fact that she's age 55?

Pam's suggestion is spot on. There are plenty of payroll services or recordkeepers that can automate the transfer of the assets once payroll has been run.