Other distributions from IRAs i.e. Health Insuranc

L1: Other distributions from IRAs i.e. Health Insuranc If I take withdrawals for health insurance premiums (having been on unemployment), perhaps for college expenses for my daughter, and also 72t withdrawals, will I end up filing two (or three?) forms, one for the medical and one for the 72t. Is it better to take separate withdrawals to make it simpler to break them out for the IRS in case of an audit? I am 55 and have my account I want to do 72t from at Vanguard. Thanks for any help…2006-08-01 01:23, By: Bill , IP: [68.121.52.48]
L2: Other distributions from IRAs i.e. Health InsurancHello Bill:
Form 5329, last I looked, is really set up to handle only one exception code; therefore you are likely looking at filing three of these with your tax return; one for each different exception you use. Needless-to-say, the SEPP distributions must come from a different IRA than the distributions for medical insurance and college expenses.
TheBAdger
wjstecker@wispertel.net
2006-08-01 06:58, By: TheBadger, IP: [66.109.211.254]

L2: Other distributions from IRAs i.e. Health InsurancTo elaborate further on this, if you have not taken any distributions yet, I would first partition the IRA into one for the SEPP and take the other penalty excepted distributions from the original account. If you have already taken these non SEPP distributions, directly transfer the optimum balance to another IRA account to use for the SEPP. Explain to Vanguard what you are doing.
If you have already taken both from the same IRA account, as long as the SEPP was set up afterwards, there should be no busted SEPP, but you might end up with a rather awkward 1099R combination on that account, that could result in some reporting challenges to avoid sending mixed signals to the IRS.
2006-08-01 23:05, By: Alan S., IP: [24.116.165.157]

L2: Other distributions from IRAs i.e. Health InsurancExcellent suggestions both – it sounds like the complexity is in how these have to be reported. If I can report the 72t out of account “a”, and the health insurance/college, or whatever out of account “b”, then I don”t have to jump through any hoops trying to say the 72t transactrions out of “a” were anything other than “equal” (with a possibility of switch to rmd somewhere along the line). Much clearer! I”ll try to run this all down to a tax guy in the next couple of days to see if they can give me a sanity check. Thanks so much.Bill(Alan S, are you the Alan S from HP in Ft. Collins by any chance?)2006-08-03 04:01, By: bill, IP: [68.121.52.48]