Skip to main content
Message Font: Serif | Sans-Serif
No. of Recommendations: 0
1. Did I hear right?

No. Unless there were nondeductible contributions to the traditional IRA, everything withdrawn is taxable income and, in your case, subject to the 10% premature distribution penalty.

2. If so, how and where do we report the withdrawal on our (filing joint) 1040. I'm using Turbo Tax Deluxe 2000 to do our taxes and am unsure where I should go in the program to report this?

3. If what I heard is wrong, how do we report the withdrawal on our 1040 and are we subject to the 10% early IRA withdrawal penalty?

TurboTax will ask about 1099-R's in the retirement income section of the interview. (At least I think that's where it is. It will ask you if you go through the entire interview.) Answer its questions, and you'll wind up with the gross amount of the distribution on line 15b, 10% of the gross distribution on line 54 with the word "NO" on the dotted line, and any withheld tax from the 1099-R included on line 58. (This assumes no nondeductible contributions.)

If there were nondeductible contributions, the taxable portion of the distribution will be computed on Form 8606, Part I, that amount will appear on line 15b with the gross amount on line 15a, and 10% of the taxable amount on line 54.

Phil Marti
Print the post  


In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.