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    Candidate99's Avatar
    Candidate99 Posts: 2, Reputation: 1
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    #1

    Jun 20, 2008, 01:41 PM
    Waiving of 10% early withdrawl penalty.
    I am cashing out my 401K. Because I am 56 y/o I am exempt from the 10% early withdrawl penalty but is there a form I need to fill out or request when doing taxes at end of year to ensure this? Thanks.
    Tom
    ebaines's Avatar
    ebaines Posts: 12,131, Reputation: 1307
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    #2

    Jun 23, 2008, 06:00 AM
    You are exempt from the 10% early withdrawal penalty from your 401(k) if you have been separated from service from your employer in the year you turn 55 or later. There are no forms to fill out - you should talk to your plan administrator so that they are aware of this, so that when they send you the form 1099-R next January reporting the distribution it shows the appropriate "reason code," so that the IRS is aware that you do not owe a penalty. If they put the wrong reason code on the form 1099-R, you can submit form 5329 with your tax filing next year to show that you meet the exemption from the penalty.
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