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What are the exceptions to penalty for early withdrawl from a 401K or IRA?
Client lost his job and decided to change career path by purchasing a business. He withdrew money from the 401K (or possibly it was an IRA) in order to fund the purchase. Is there any way to avoid the penalty for early withdrawl?
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Tax Professional Answers
Leave a Comment 204 weeks ago
File Form 5329 with 1040. On Form 5329 Line 2, fill the amount with the exception code.
The exception code can be found on i5329, page 3-4.
Go to www.irs.gov, search 5329 in search box, you will see the Form 5329 and Instruction of 5329. You can read online or download and print out.