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10% Early withdrawal penalty relief.
11/3/09 8:13 AM
Total Views: 65
Total Views: 65
Is there relief for all or some of the early 10%withdrawal penalty from retirement funds for medical emergency needs?
All Replies: Answers (2)
Comments (2)
Rating + 4
Answer
11/3/09 8:37 AM
Yes, the 10% penalty does not apply for the TPs deductible medical expenses. If the total distribution is $10,000 for $10,000 of expenses, and the AGI is $100,000, the total deductible expenses are $2,500, so the penalty is only $750($10% on the other $7,500, the so-called 7.5% floor).
As it gets closer to tax season, I wish I had some hair to pull out.
Rating + 1
Answer
11/3/09 10:13 AM
There is a relief provision to the extent of the deductable medical expenses as AccountantMan pointed out. So if the deductable medical expenses after the 7.5% floor are $2,500 the penalty relief would be $250.00 meaning that the penalty would then be $750 instead of $`1,000 on a $10,000 distribution
I salute all our current Military and our Veterans.
Comment
11/3/09 10:52 AM
Thats why I gave you points,
I salute all our current Military and our Veterans.
Comment
Couldn't have said it better myself, MJ.