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#d0e220You'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.htmlForm 5329http://www.irs.gov/app/vita/content/basic/lesson07/images/5329.pdfintercst
The link for Form 5329 seems to be broken, here's a good one.http://www.irs.gov/pub/irs-pdf/f5329.pdfintercst
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.
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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