[craigatkins]

My wife is 52 years old and recently retired. She rolled her 401k into a traditional IRA account. I have been told that one of the exceptions to the 10% penalty is for the equal monthly payment of a health insurance policy. Is this correct and how do we go about documenting that on a tax form. This would be something that we would do this year and deduct next year. Thanks for the help.

[craigatkins]

Just getting this back to the top hoping for some help

[craigatkins]

One more time.

[ebaines]

Yes, you are correct - a withdrawal from an IRA that is not more than the cost of your medical insurance can be taken without the usual 10% early withdrawal penalty. You should tell your IRA custodian that this is the purpose of the withdrawal. At the end of the year they will send you a 1099-R documenting the withdrawal. On that form they will indicate what they think is the reason for withdrawal - if it shows reason code 2 (Early distribution, exception applies), then no problem. But if it shows reason code 1, meaning early distribution with no known exception, then that means they think the withdrawal is subject to penalty. In this case you will have to file form 5329 with your tax return to document why a 10% penalty is not required.

[craigatkins]

Thank you very much, I really appreciate it.