tax details on withdrawal from IRA before 59.5

L1: tax details on withdrawal from IRA before 59.5Last year I had a need to withdraw funds from an IRA outside of my SEPP IRAs (thanks to this forum for the recommendation of setting up separate IRAs for this purpose!) and I am now preparing to pay the tax dueand 10% penalty since I withdrew these funds before reaching age 59.5. How will the 1099 reporting this withdrawal be coded and how do I report the penalty tax on my tax return?2006-01-16 09:58, By: Colin, IP: [71.208.232.156]
L2: tax details on withdrawal from IRA before 59.5The 1099R should be coded with a “1” meaning an early withdrawal with no known exception to penalty. If you agree, there is no additional form needed, just enter the 10% penalty directly on line 60 of Form 1040. The IRS also suggests you enter “No” under the heading “Other Taxes” on the far left to indicate there is no need for Form 5329.
The extra income will go on lines 15a and 15b along with your SEPP income from the separate 1099R. That 1099R should be coded “2” for the penalty exception, but if it is not, then you will needa 5329 to claim the exception from penalty on that portion (exception # 02).2006-01-16 13:44, By: Alan S., IP: [24.116.165.157]