oops, rolled over 401K into IRA, broke the 72t

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L1: oops, rolled over 401K into IRA, broke the 72t
Well, I wasn’t watching what I was doing. Have been taking 72t SEPP since 2015 (I am 60 going on 61, started SEPP in 2015 at age 58) Last year, I rolled over a large chunk of 401K into the 72t IRA. Then today, I rolled over the rest of the 401K because I have retired from the company providing the 401K. While I was at financial advisor’s office to request rollover, I brought up tax implications. Advisor did not know and I said I will check it out. In 2015, I knew the rules, but forgot about them and was an idiot for not re-educating myself before doing any rollovers. I would have never tried to get early retirement distributions, but my spouse lost his job in 2010 and never got re-hired. We needed some money. Now, I am regretting ever tapping that money. Will I be penalized for every year (4 distributions) that I took SEPP, or only the ones (2 years) where I was younger than 59.5? Thanks for any help.
dob 6/5/57 1st distribution july 2015
2018-03-28 01:39, By: angola, IP: []

L2: oops, rolled over 401K into IRA, broke the 72t
Fortunately, you will only be penalized for distributions you took prior to 12/5/2016. Since your plan was busted by last year’s rollover, your plan ended on the date of the first 401k rollover. Since that was in 2017, you should report the plan being busted on your 2017 tax return.
You need to file Form 5329 with your 2017 return, paying the 10% penalty on all prior penalty free distributions you took before 12/5/2016. You do not have to amend your 2015 or 2016 returns since the entire penalty is reported for the year the plan was busted (2017). Again, none of your 2017 distributions are subject to the penalty and your 2017 1099R should be coded 7 in Box 7.
Since you no longer have a plan, you can distribute as little or as much as you wish from here on.
You can even claim a different penalty exception than the SEPP exception for your distributions between July, 2015 and December, 2016 if you qualify for one of them, but that is a long shot.
2018-03-28 03:33, By: Alan S, IP: []

L3: oops, rolled over 401K into IRA, broke the 72t
thank you sooooo much for the info. very confusing stuff.
2018-03-28 04:59, By: angola, IP: []

L3: oops, rolled over 401K into IRA, broke the 72t
Alan, I just went through all my paperwork. The rollover was transferred into the SEPP 72t account, but within 60 days a new IRA account was opened, where the rollover and other funds went. That would also be deemed as breaking the SEPP account, correct? If any funds were going to be moved out of the IRA, it would have had to occurred before the SEPP distribution began? Basically, no contributions, rollovers, or distributions (other than the SEPP) can occur in the IRA once SEPP commences?
2018-03-28 05:21, By: angola, IP: []