Early IRA And 401(k) Payout Penalties

Early IRA And 401(k) Payout Penalties


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Early retirement payouts are an IRS red flag. The agency wants to make sure that individuals are properly reporting distributions from IRAs and qualified employer plans, such as 401(k)s, that are withdrawn before age 59½. An IRS review from a number of years ago found that 40% of people scrutinized made mistakes, with most of those errors coming from taxpayers who didn’t qualify for one of the numerous exceptions to the additional excise tax on early distributions. 





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