Retirement tax questions
@Zypher wrote:
The account is with TDAmeritrade, so not a small company by any means. When I distributed the amount, I put 'Y' and 'Premature (with exception)' thinking incorrectly that removing contributions meant an exception.
Removing your own contributions is not an exception to the penalty. You can always remove your own contributions tax an penalty free, but that is entered a different way. You financial institution cannot determine that since your contributions apply to all Roth IRA accounts in aggregate, and the financial institution has no knowledge of other accounts.
A code J allows for your own contributions.
These are the exceptions that they refer to.
Note: "Another reason" means:
Other. The following exceptions also apply.
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Distributions incorrectly indicated as early distributions by code 1, J, or S in box 7 of Form 1099-R. Include on line 2 the amount you received when you were age 591/2 or older.
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Distributions from a section 457 plan, which aren’t from a rollover from a qualified retirement plan.
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Distributions from a plan maintained by an employer if:
1.
You separated from service by March 1, 1986;
2.
As of March 1, 1986, your entire interest was in pay status under a written election that provides a specific schedule for the distribution of your entire interest; and
3.
The distribution is actually being made under the written election.
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Distributions that are dividends paid with respect to stock described in section 404(k).
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Distributions from annuity contracts to the extent that the distributions are allocable to the investment in the contract before August 14, 1982. For additional exceptions that apply to annuities, see Tax on Early Distributions under Special Additional Taxes in Pub. 575.
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Distributions that are phased retirement annuity payments made to federal employees. See Pub. 721 for more information on the phased retirement program.
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Permissible withdrawals under section 414(w).
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Distributions that are qualified disaster distributions.
