Discussion:Medical expense exception to early withdrawal penalty from qualified plan
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| Revision as of 19:20, 30 October 2007 Conrad (Talk | contribs) (Kevinh5, I take) ← Previous diff |
Revision as of 19:30, 30 October 2007 Bengoshi (Talk | contribs) (Premature distri) Next diff → |
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| + | {{ForumReplyPost|UserID=Bengoshi|Date=30 October 2007|Text=Premature distributions from retirement plans are not subject to the 10% penalty only <u>to the extent they don't exceed the amount allowable as medical expense deductions under IRC 213</u>. | ||
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| + | Unfortunately, I reckon if the spouses filed as married filing joint, in computing the allowable medical expense deduction they'd look at the AGI of both taxpayers -- not just the wife. Had they filed separately the wife's AGI would have been used in computing the 7.5% limitation. Check into other possible exceptions to the 10% penalty or whether some of the distributions came from after-tax contributions which wouldn't be included in gross income of taxpayers...}} | ||
Revision as of 19:30, 30 October 2007
Discussion Forum Index --> Basic Tax Questions --> Medical expense exception to early withdrawal penalty from qualified plan
Discussion Forum Index --> Tax Questions --> Medical expense exception to early withdrawal penalty from qualified plan
| 30 October 2007 | |
| Spouse takes early distribution of $5k from a retirement plan to pay for $5k in unremibursed medical expenses. She files jopintly with her husband. In figuring the amount of the distribution she can exlcude from the 10% early withdrawal penalty, she can exclude the total unreimbursed expenses less 7.5% of AGI. Does "AGI" for purposes of the calculation mean "her portion" of the joint AGI or does it mean "joint AGI". The first will allow her to exclude some of the early distribution from the 10% penalty. If she has to include her "husband's portion" of AGI in the calculation she won't be able exclude any of the early distribution from the 10% penalty. | |
| 30 October 2007 | |
| Can they then do married filing separately? I would think this is based on the filing status and not individual AGI if they are different. Can she itemize MJS? | |
| 30 October 2007 | |
| Conrad - you may want to take a good tax class like H & R Block gives to beginning tax preparers to learn about AGI. Good luck in your tax career - but don't skimp on education | |
| 30 October 2007 | |
| Kevinh5, I take from your humor/sarcasm, your answer is "no" to my question. I didn't think I could do it the way I would like to do it, but I could not find anything specific in the code, thus my reason for posting the question. Sandysea, I think it is based on filing status but again I thought I would throw it out there. Thanks for responding. | |
| 30 October 2007 | |
| Premature distributions from retirement plans are not subject to the 10% penalty only to the extent they don't exceed the amount allowable as medical expense deductions under IRC 213.
Unfortunately, I reckon if the spouses filed as married filing joint, in computing the allowable medical expense deduction they'd look at the AGI of both taxpayers -- not just the wife. Had they filed separately the wife's AGI would have been used in computing the 7.5% limitation. Check into other possible exceptions to the 10% penalty or whether some of the distributions came from after-tax contributions which wouldn't be included in gross income of taxpayers... | |
