IRS Form 5329: Retirement Account Penalties
This form calculates additional taxes on early withdrawals and other retirement account violations.
Understanding Form 5329
Form 5329 reports special taxes and penalties for improper use of retirement accounts.
Key Penalties Reported:
- 10% early withdrawal penalty (Section 72(t))
- 6% excess contributions penalty
- 50% required minimum distribution (RMD) penalty
- Health savings account (HSA) penalties
When You Need to File
Common Scenarios:
- Took IRA/401(k) withdrawals before age 59½
- Contributed more than annual limits
- Missed required minimum distributions
- Used HSA funds for non-qualified expenses
Key Exceptions:
- First-time home purchase ($10,000 limit)
- Higher education expenses
- Medical expenses exceeding 7.5% of AGI
- Disability or death
Required Documentation
- Form 1099-R showing distributions
- Records of contributions (Form 5498)
- Proof of qualifying exceptions
- Calculation of excess contributions
Penalty Calculations
- Early distributions: 10% of taxable amount
- Excess contributions: 6% per year until corrected
- Missed RMDs: 50% of shortfall
- HSA misuse: 20% of non-qualified distributions
How We Can Help
Our retirement account penalty services include:
- Exception qualification analysis
- Penalty minimization strategies
- Form 5329 preparation
- IRS penalty abatement requests
- Retirement distribution planning
Don't Overpay Retirement Account Penalties
Many taxpayers qualify for exceptions they don't know about.
Call 972-519-0041 to review your situation.