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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 75383  
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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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: 43893 of 75383
Subject: Re: New SEPP Rules for 2004 Federal Tax Return Date: 1/5/2005 6:30 PM
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The link for Form 5329 seems to be broken, here's a good one.

http://www.irs.gov/pub/irs-pdf/f5329.pdf

intercst

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Author: billjam Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 43898 of 75383
Subject: Re: New SEPP Rules for 2004 Federal Tax Return Date: 1/6/2005 12:09 AM
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Well that sucks! 2004 was my last year of SEPP. Why couldn't they have waited a year to make a change which doesn't make any sense anyway? Seems like just another way to hassle taxpayers.


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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: 43899 of 75383
Subject: Re: New SEPP Rules for 2004 Federal Tax Return Date: 1/6/2005 12:34 AM
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billjam writes,

Well that sucks! 2004 was my last year of SEPP. Why couldn't they have waited a year to make a change which doesn't make any sense anyway? Seems like just another way to hassle taxpayers.


It's really just a matter of checking a couple of boxes on Form 5329. Worrying about it is probably going to take more out of you than completing the form.

intercst

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