How to Break a SEPP
L1: How to Break a SEPPI started my SEPP withdrawals in March of 2009 when unemployed. I received my second SEPP withdrawal in March of 2010. Am now employed and want to break the SEPP. How to do this using form 5329? Do I have to go back and amend the 2009 return for the amount received in 2009,or do I just total the amounts received in 2009 and 2010 and then report the brokenSEPP on my 2010 Federal Tax Returnonly?2011-01-23 10:07, By: Tom, IP: [18.104.22.168]
L2: How to Break a SEPPJust report it with 2010 tax return. Pay 10% penalty on total distributions taken since inception, in addition to including the 2010 distribution in taxable income in calculating the income tax.
However, take a look at the other exceptions to the 10% penalty. Some, or all, of your distributions might qualify as eligible for other waivers, and thereby reduce your penalty.2011-01-23 16:47, By: dlzallestaxes, IP: [22.214.171.124]