Taxpayer withdrew $13,500 from pension plan and 1099-R has distribution code of "1" in box 7. IRA/Sep/Simple marked. Taxpayer had $11,650 in medical expenses in 2006. Would I just fill out form 5329 with exception code 05, (IRC section 72(t)(2)(B)) to have $11,650 of the $13,500 qualify for the exception to 10% penalty?
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If I'm not mistaken, the portion of medical expenses that can be used to decrease the penalty is the amount over 7.5%.
They don't have to itemize, but you do have to figure that part out.You have the right to remain silent. Anything you say will be misquoted, then used against you. -
I agree with WhiteOleander.Comment
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