section 72t distributions
i have received distributions for the past four years (fourth one in early 2009) under a section 72t plan. i am now 60 years old. can i make an additional withdrawal from my ira during 2009? since i’ll end up paying more taxes this year (not looking to reduce my setion 72 distribution, but rather increase it), can i do so without jeopardizinf my withdrawals prior to this year?
Permalink Submitted by Anonymous (not verified) on Tue, 2009-09-29 16:23
Simply put, if you are on the 4th year of an SEPP, you must continue with the exact amount calculated under Amortization or Annuitization method. You can switch to RMD method, but that usaully reduces the amount, so you are beyond that decision for 2009. If you did [u]not[/u] use another IRA balance in the SEPP 72(t) exception, you are free to take more (most use all their IRAs, so I suspect not).
So, No.
If you do take more, the SEPP is violated and the IRS will penalize you for all distributions. You will have to pay taxes on all prior distributions (interest too, I believe).