One of the common uses of IRS form 5329 is to waive exceptions to the 10% penalty for early withdrawal of a pension distribution. Access the form by following these steps:
- Down the left side of the screen, click on Federal.
- Down the left side of the screen, click on Other tax situations.
- Scroll down to Additional Tax Payments and click the down arrow to the right.
- Click Start/Revisit to the right of Extra tax on early retirement withdrawals.
IRS form 5329 Additional Taxes on Qualified Plans and Other Tax-Favored Accounts is the tax form used to calculate possible IRS penalties from the situations listed below and possibly request a penalty waiver. IRS form 5329 applies to each individual that might owe a penalty, so for married couples filing jointly, each spouse must complete their own form.
You may need this form in three situations:
- Early distributions from a tax-favored account
- Excess contributions to a tax-favored account
- Failing to take required minimum distributions
The software will make the form available when needed.