If a taxpayer has taken a retirement withdrawal, follow these steps to determine if they qualify for an exemption from the early withdrawal penalty and properly enter the exclusion:
Steps to Enter Your Information:
Check IRS Retirement Withdrawal Exceptions
Google IRS retirement withdrawal exceptions to determine if the taxpayer’s withdrawal qualifies for an exemption from the early withdrawal penalty.
Find the Correct Exception Code
If the withdrawal qualifies, Google 5329 Exception Codes TaxWise to locate the appropriate exception code.
Navigate to Form 5329
Open Form 5329 SP, Page 1 in the tax software.
Enter the TaxWise Exclusion Code
Input the correct TaxWise exclusion code on Line 2 of Form 5329.
Enter the Allowable Exclusion Amount
Find the allowable exclusion amount on the IRS website and enter it on Line 2 of Form 5329.
Additional Resources
For a visual step-by-step tutorial, check out these guides:
Following these steps ensures accurate setup. Double-check all entries to avoid issues. If you experience difficulties, refer to the tutorials linked above or contact support for assistance.