2007-02-01 23:43:33 · 2 answers · asked by wonderin2 2 in Business & Finance ➔ Taxes ➔ United States
You will receive a 1099R showing the distribution. If you are using a software package, you will enter all the data from the 1099R into that program.
If you are doing the return manually with Form 1040, enter the amount from Box 1 on Line 16a. Enter the amount from Box 2 on Line 16b of the 1040.
If your distribution is coded "1" in Box 7, then you may be subject to a penalty of 10% of the distribution. This penalty is entered on Line 60.
If you have had tax withheld from the distribution, include that amount on Line 64.
If you are receiving a series of payments over at least five years, or have paid medical insurance out of pocket after you lost your job, you may be able to avoid some of the penalty. These exceptions are shown in IRS Publication 590.
http://www.irs.gov/pub/irs-pdf/p590.pdf
2007-02-01 23:47:59 · answer #1 · answered by ninasgramma 7 · 2⤊ 0⤋
File Form 5329 http://www.irs.gov/pub/irs-pdf/f5329.pdf to account for the early distribution and calculate the penalty. Here's a link to the intsructions: http://www.irs.gov/pub/irs-pdf/i5329.pdf
2007-02-02 07:52:41 · answer #2 · answered by Bostonian In MO 7 · 0⤊ 0⤋