L1: ending 72tI am 56 and started my monthly 72t distributions last year. I have had about 8 distributions. We have had some events ocurr and would like to discontinue the distributions. Is this a possibility without penalty?2010-10-26 00:23, By: td2010, IP: [22.214.171.124]
L2: ending 72tIf you are making withdrawals from an IRA, then you will owe the 10% penalty tax on the 8 distributions that you have taken to date. If some of the distributions occuredin 2009, there may also be some interestdue on past due penalties from the 2009 distributions.
If your SEPP was part of a 401(k) and you seperated from service after age 55, then you would not have needed a SEPP as a different exemptionmay apply.
Please post any additional questions taht you may have.2010-10-26 01:07, By: Gfw, IP: [126.96.36.199]
L3: ending 72tTHere is a list of about 10 other exceptions to the 10% penalty ( other than SEPP 72-T) that your distributions might have qualified under. Research that aspect in relation to your situation.
Respond with date that you started, distributions in 2009, 2010, and reasons that you needed the money ( i.e. Unemployment, health insurance premiums, medical expenses > 7.5% of AGI, higher education expenses of dependent, first time home purchase, IRS levy, military reservist, etc)2010-10-26 02:39, By: dlzallestaxes, IP: [188.8.131.52]
L3: ending 72tCan I withdraw a portion of the funds and leave enough to fund the remainder of the distributions? Do I also understand correctly that a one time realignment is allowed? thanks2010-10-26 03:51, By: td2010, IP: [184.108.40.206]
L4: ending 72tYes, you might want to look into the option of making the one time switch to the MD method for 2010. That usually reduces your distribution around 40% and it sounds like you have taken out about 67% so far. While you may have taken out too much to make that switch, you can also roll part of the last distribution back to equal the correct amount if you do it within 60 days of the distribution.
But this means that you would not bust the plan but would have to continue using the MD method until the plan ends. That is a completely new calculation every year on a calendar year basis. Don’t know if this will work for you because you did not post enough about your total situation here, but it might be worth investigating.
Be sure you totally understand what is involved before acting.
2010-10-26 04:23, By: Alan S., IP: [220.127.116.11]