72t hardship question
L1: 72t hardship questionIf a person has been on the 72T program for 7 years with a monthly distribution of $1,451.27 and only has 12 months until the 72T program is finished and is having financial hardships, (foreclosure notice on their home) is there any IRS exceptions to not be penalized for busting the 72T program due to financial hardships?
existing 72t plan
72t started 6/23/082015-06-02 21:36, By: BRS, IP: [126.96.36.199]
L2: 72t hardship questionNo exceptions for financial hardships. Do what you can to keep the plan running until the formal end date. Breaking now would create additional hardships in terms of taxes owed to the IRS.2015-06-02 21:46, By: Gfw, IP: [188.8.131.52]
L3: 72t hardship questionI posed the same question on Ed Slots and received this answer, do you know if this is correct?
“No, but the person is not required to continue monthly distributions as long as the annual total is correct. The 2015 balance could be distributed right now (7 months worth to bring the total to 12 months, then options for 2016 include a full annual payment in January. Upon reaching 59.5, the person is able to then take out as much as they wish without penalty. Probably not enough, but it might buy some time while saving the 72t plan.”2015-06-02 22:06, By: BRS, IP: [184.108.40.206]
L4: 72t hardship question>>the person is not required to continue monthly distributions as long as the annual total is correct
The full statement is correct. The monthly payments for the balance of the 2015 year could be taken now and then the 2016 distribution could be taken in January.2015-06-02 22:12, By: Gfw, IP: [220.127.116.11]
L5: 72t hardship questionIf there is any balance after taking the rest of the 2015 and January taking the full 2016 annual payment, then do not take any more until after 6/21/2016. Otherwise you will bust the plan retroactively.2015-06-03 01:46, By: dlzallestaxes, IP: [18.104.22.168]