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Author: intercst Big funky green star, 20000 posts Top Favorite Fools Top Recommended Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75340  
Subject: New SEPP Rules for 2004 Federal Tax Return Date: 1/5/2005 6:16 PM
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If you are under age 59-1/2 and taking penalty-free withdrawals from your IRA here's some "news you can use."

For the 2004 tax year, the IRS did away with "exception code 2" on Form 1099-R. The only code you'll see on Form 1099-R is exception code 1. See link:

http://www.irs.gov/instructions/i1099r/ar02.html#d0e220

You'll have to file IRS Form 5329 with your return to claim the exception for "substantially equal periodic payments" (SEPP) and escape the 10% penalty. Here's a link to form 5329 and instructions.

Instructions for Form 5329.
http://www.irs.gov/instructions/i5329/ch01.html

Form 5329
http://www.irs.gov/app/vita/content/basic/lesson07/images/5329.pdf

intercst
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