How do I avoid the 10% early retirement distribution penalty used on education expenses?
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starlove2 asked:
Right now, I’m being penalize 10% on my tax return for the early retirement distribution I made near the end of last year. I used most of it on this Spring’s classes of this year. Can I avoid the penalty if I used it for education expenses after I had received the distribution? If so, how do I report it on the tax return?
Right now, I’m being penalize 10% on my tax return for the early retirement distribution I made near the end of last year. I used most of it on this Spring’s classes of this year. Can I avoid the penalty if I used it for education expenses after I had received the distribution? If so, how do I report it on the tax return?
Thanks!
Moissanite Engagement Rings
December 23rd, 2011 at 8:25 am
1040, form 5329 has the higher education exception.
This is a two-fer, the expenses keep you from paying the penalty AND can be used for a credit.
December 25th, 2011 at 10:49 am
How much is “most of it”? You can avoid the 10% penalty IF your distribution was not more than the amount paid for education expenses. Go to your local H&R Block office and get it done right!