Vanguard Annuity will code as early distribution

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L1: Vanguard Annuity will code as early distributionI’m planning to start a 72(t) withdrawal series from my Vanguard Variable Annuity account. Vanguard has informed me that they will code the annual withdrawals as early distributions each year on my tax form. I believe that isn’t a problem because I can report “Exception 2” on form 5329 line 2.I also plan to use September’s 4.16% rate and take my first distribution before the end of this month (November).Do you see any problems with my understanding or plans?Thank you!Joel2008-11-12 07:20, By: Joel, IP: []
L2: Vanguard Annuity will code as early distributionNo problems, you are correct with your post.Note that you have two choices for your 2008 total distribution:1) 2 months worth (1/6 of the annual amount)2) Take the full annual amount split between Nov and Dec anyway you wish except that the first payment must be made in November.If you set this up on monthly installments, have the payment made early in the month so you will have a chance to correct any foul ups before the calendar year ends.For the record, Vanguard has a policy of always coding 72t plan distributions as early, thereby requiring all 72t participants to file the 5329.2008-11-12 13:35, By: Alan S., IP: []