What Form Do I Use to Report an Early IRA Withdrawal?

Form 1040 allows you to properly report your early IRA withdrawal.

Form 1040 allows you to properly report your early IRA withdrawal.

Taking an early IRA withdrawal often costs you extra in taxes and penalties, but sometimes you don't have any other options. It's important to report the distributions on your taxes correctly, otherwise the Internal Revenue Service could hit you with extra penalties. You should receive a Form 1099-R from your financial institution that shows the amount of your early withdrawal and how much was withheld for taxes. When you file your taxes, you need to use Form 1040 and potentially Form 5329.

Report the taxable portion of your IRA distribution on line 15b of Form 1040. The taxable portion appears in Box 2a of Form 1099-R. This amount adds to your taxable income for the year.

Report the total amount of the distribution on line 15a if any of the distribution is not taxable. If the entire distribution is taxable, such as a distribution from a traditional IRA to which you haven't made any nondeductible contributions, leave line 15a blank.For example, if you took a Roth IRA distribution of $15,000 and only $1,000 was taxable, you would enter $15,000 on line 15a.

Calculate your early withdrawal penalty on Form 5329 if any of your early IRA withdrawal is taxable. This form is also used to figure the amount exempt from the penalty if you qualify for an exception. Otherwise, the penalty equals 10 percent of the taxable portion of your withdrawal. If none of your withdrawal is taxable, you don't need to complete Form 5329.

Enter the penalty from Form 5329 on line 58 of your Form 1040 tax return. This adds directly to your tax due for the year.

Enter the amount withheld for federal income taxes from Box 4 of your Form 1099-R on line 62 of your Form 1040 tax return. This decreases your taxes due.

Items you will need

  • IRS Form 1099-R
  • IRS Form 1040
  • IRS Form 5329

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