I retired at age 56 and am now 59. My pension annuity payments are supposed to be guided by rule 72t. However, I end up owing taxes on my federal return. Looking at a previous FAQ about this (from about 4 years ago), it mentions code 2 or 7 from 1099R will automatically trigger TurboTax to treat the payments as 72t, however my 1099R has code 1. The previous FAQ said there is another area of Turbo tax where I can input information to trigger the 72t. Does anyone know how to do this?
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This, according to dmertz, who's a retirement plan guru:
Enter the Form 1099-R exactly as received under Wages & Income (or Personal Income) -> Retirement Plans and Social Security -> IRA, 401(k), Pension Plan Withdrawals (1099-R), then answer the follow-up questions.
If the code on the Form 1099-R is code 2 or 7, TurboTax will automatically treat the distribution as not subject to an early-distribution penalty. Otherwise, later when TurboTax prompts you enter amounts that are exempt from the early-distribution penalty, enter the amount of the distribution as the amount received as Equal Periodic Payments.
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