Useful Links: IRS.gov Help For Hurricane Victims
News Essentials What's Hot News Releases IRS - The Basics IRS Guidance Media Contacts Facts & Figures Around The Nation e-News Subscriptions
The Newsroom Topics Multimedia Center Noticias en Español Radio PSAs Tax Scams/Consumer Alerts The Tax Gap Fact Sheets IRS Tax Tips Armed Forces Latest News
IRS Resources Compliance & Enforcement News Contact Your Local IRS Office Filing Your Taxes Forms & Instructions Frequently Asked Questions Taxpayer Advocate Service Where to File IRS Social Media
| Issue Number: Tax Tip 2019-36
Here's what people should know about taking early withdrawals from retirement plans Taxpayers may need to take money out of their individual retirement account or retirement plan early. However, this can trigger an additional tax on top of other income tax they may owe. Here are a few key things for taxpayers to know: - Early Withdrawals. An early withdrawal normally is taking cash out of a retirement plan before the taxpayer is 59½ years old.
- Additional Tax. The IRS charges a 10 percent penalty on early withdrawals from most qualified retirement plans. There are some exceptions to this rule.
- Nontaxable Withdrawals. The additional tax does not apply to nontaxable withdrawals. These include withdrawals of contributions that taxpayers paid tax on before they put them into the retirement plan.
- Rollovers are a nontaxable withdrawal. A rollover happens when taxpayers take cash or other assets from one retirement plan and put the money in another plan within 60 days. A rollover can also happen when they direct their plan administrator to make the payment directly to another retirement plan or to an IRA.
- Form 5329. Taxpayers who took an early withdrawal last year may have to file Form 5329 with their federal tax return.
- Use IRS e-file. Early withdrawal rules can be complex. IRS e-file is the easiest and most accurate way to file a tax return. The tax software will pick the right tax forms, do the math, and help find tax benefits.
More information:
IRA FAQs – Distributions
Do I Meet an Exception to the Additional Tax on Early Distributions from IRAs or Retirement Plans?
Publication 590-B, Distributions from Individual Retirement Arrangements
Publication 575, Pension and Annuity Income
Filing Your Taxes
IRS Tax Map Share this tip on social media -- #IRSTaxTip: Here's what people should know about taking early withdrawals from retirement plans. https://go.usa.gov/xESNc Back to Top     
Thank you for subscribing to IRS Tax Tips, an IRS e-mail service. For more information on federal taxes please visit IRS.gov. This message was distributed automatically from the IRS Tax Tips mailing list. Please Do Not Reply To This Message. |
No comments:
Post a Comment