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I cashed out my IRA for $4,500 and I am not 59 1/2. What tax form am I required to complete in addition to the 1040?


ANSWER


Expert Michael Lim's Answer:

If you take a full distribution on your IRA prior to age 59 1/2, you will be required to pay the 10% early distribution penalty, in addition to any tax due on the distribution.

 

The penalty is calculated on Form 5329, "Additional Taxes on Qualified Plans."  

Michael Lim, CPA

California

16 yrs experience

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