Tax Pros - Early Withdrawl Penalty - Need anwer kinda fast :)

Factual Questions
1

I think I should be paying a 10% penalty for early withdrawal from a retirement account.
However I don’t see it called out anywhere on my 1099-R and I don’t see anywhere to account for it on the 1040?

How do I pay it and avoid any penalties?

2

The one time I needed to pull some money out of an IRA the broker asked if I wanted them to withhold the taxes and penalty, and I said yes. I don’t remember the specifics on the paperwork, but I do remember that the amount withdrawn was more than the amount I received. You might ask your broker about it.

3

When I had to make an early withdrawal the finance company I had my money with made the deduction. If you owe a penalty I did not think you could withdraw money without first paying it. Hope a tax guy come along.

4

Hmm…

From what I can find online I need to fill out form 5329 which basically says “add 10% on line 59.”

If worst comes to worst I’ll If just use 5329, pay the extra 10% and let them figure it out. They’re usually pretty good about that stuff, a few years ago they sent me a check in June saying “You paid to much dummy”.

5

Why not just call the brokerage that held the retirement account and ask them about it? They should be able to tell you whether they withheld the ten percent.

6

Well now that would be far too easy, wouldn’t it :smack:

7

Form 5329 is the right form (and it probably is as simple as “write down 10% of your withdrawal,” but I don’t know the specifics of your tax situation).

The tax should carry over to line 59 on the 1040.

The 1099-R (box 4 for federal tax, box 12 and box 15 for a state and local taxes) should tell you if the broker withheld any tax. (I think they are supposed to get your express wishes regarding withholding on file before they make the distribution.)

8

What code is in Box 7 of Form 1099R and do you have the explanation of those codes on the back?

9

Yes, 1) what code is in box 7, and 2) what type of retirement account is it? E.g. 401k, Traditional IRA, Roth IRA? E.g. if it is a Roth you may not owe anything. You cannot get an answer without that information.