• About Us
  • Contact Us

bookkeepingmiamiblog

~ taxes, finances and more…..

bookkeepingmiamiblog

Tag Archives: Roth IRA

Early Distribution from Retirement Plans May Have a Tax Impact

23 Thursday Feb 2012

Posted by bookkeepingmiami in Retirement

≈ Leave a comment

Tags

401(k), Income Tax, Individual Retirement Account, Internal Revenue Service, IRA, Pension, Retirement plans in the United States, Roth IRA

Early Distribution from Retirement Plans May Have a Tax Impact

Tax

Tax (Photo credit: 401K)

Here are 10 facts from the IRS about the tax implications of an early distribution from your retirement plan.Taxpayers may sometimes find themselves in situations when they need to withdraw money from their retirement plan early. What they may not realize is that that transaction may mean a tax impact when they file their return.

1. Payments you receive from your Individual Retirement Arrangement before you reach age 59 ½ are generally considered early or premature distributions.

2. Early distributions are usually subject to an additional 10 percent tax.

3. Early distributions must also be reported to the IRS.

4. Distributions you roll over to another IRA or qualified retirement plan are not subject to the additional 10 percent tax. You must complete the rollover within 60 days after the day you received the distribution.

5. The amount you roll over is generally taxed when the new plan makes a distribution to you or your beneficiary.

6. If you made nondeductible contributions to an IRA and later take early distributions from your IRA, the portion of the distribution attributable to those nondeductible contributions is not taxed.

7. If you received an early distribution from a Roth IRA, the distribution attributable to your prior contributions is not taxed.

8. If you received a distribution from any other qualified retirement plan, generally the entire distribution is taxable unless you made after-tax employee contributions to the plan.

. There are several exceptions to the additional 10 percent early distribution tax, such as when the distributions are used for the purchase of a first home (up to $10,000), for certain medical or educational expenses, or if you are totally and permanently disabled.

10. For more information about early distributions from retirement plans, the additional 10 percent tax and all the exceptions, see IRS Publication 575, Pension and Annuity Income and Publication 590, Individual Retirement Arrangements (IRAs). Both publications are available at http://www.irs.gov or by calling 800-TAX-FORM (800-829-3676).

Links:

  • Publication 575, Pensions and Annuities (PDF 227K)
  • Publication 590, Individual Retirement Arrangements (IRAs) (PDF 449K)
  • Form 5329, Additional Taxes on Qualified Plans (including IRAs) and Other Tax Favored Accounts   (PDF 72K)
  • Form 5329 Instructions (PDF 40K)
Advertisement

Share this:

  • Tweet
  • Email
  • Print

Like this:

Like Loading...
Proud member of the AIPB

NACPB

Proud member of the NACPB

Categories

  • About Us (2)
  • Bookkeeping Services (2)
  • College (2)
    • College Financial Aid (1)
  • Income Tax (24)
  • Miami (1)
  • Retirement (2)
  • Small Business (7)
  • Tax Credits (6)
  • Tax Volunteer (1)
  • Taxpayers (13)
    • Students (1)
  • Uncategorized (1)

Pages

  • About Us
  • Contact Us
February 2023
M T W T F S S
 12345
6789101112
13141516171819
20212223242526
2728  
« Aug    

Enter your email address to follow this blog and receive notifications of new posts by email.

Join 283 other subscribers

Accounting Adjusted gross income Adoption Adoption tax credit Amended U.S. Individual Income Tax Return American Opportunity Credit American Opportunity Tax Credit Barack Obama Bookkeeping Bookkeeping and Tax Preparation Business Charitable organization Child and Dependent Care Credit College Financial Aid Dependent Care Expenses Donation Earned Income Tax Credit Efficient energy use Employment Energy Energy accounting Energy Star Expense Facebook FAFSA Filing (legal) Finance Firms Fiscal year Form 1040 Free File Fresh Start Initiative Higher education Hire purchase Home Improvements House Income Tax Individual Retirement Account Insurance Internal Revenue Service IRS IRS e-file IRS tax forms Itemized Deduction Lifetime Learning Credit marriage Notice Payment Pension Preparer Tax Identification Number Quickbooks Records management Relocation (personal) Roth IRA Small business Social media Social Security Social Security number Solar water heating Standard Deduction Tax Tax credit Tax deduction Tax form Tax preparation Tax refund tax return Tax return (United States) Tax Tip Tax Withholding Twitter United States United States Postal Service Wage YouTube

Blog at WordPress.com.

Privacy & Cookies: This site uses cookies. By continuing to use this website, you agree to their use.
To find out more, including how to control cookies, see here: Cookie Policy
  • Follow Following
    • bookkeepingmiamiblog
    • Already have a WordPress.com account? Log in now.
    • bookkeepingmiamiblog
    • Customize
    • Follow Following
    • Sign up
    • Log in
    • Report this content
    • View site in Reader
    • Manage subscriptions
    • Collapse this bar
%d bloggers like this: