Form 5329 (2010) Checklist
Purpose and Filing Requirements
Form 5329 reports additional 10 percent and 6 percent excise taxes on early distributions, excess contributions, and insufficient minimum distributions from IRAs, Roth IRAs, Coverdell ESAs, qualified tuition programs, Archer MSAs, and HSAs for the 2010 tax year. The 2010 instructions clarify that if only the 10 percent early distribution tax applies, filers may report directly on Form 1040, line 58, or Form 1040NR, line 56, without filing Form 5329.
You must file Form 5329 if you received early distributions subject to additional taxes and need to claim an exception, if you made excess contributions to any covered account, or if you failed to receive required minimum distributions. The form must be attached to your 2010 Form 1040 or Form 1040NR by the due date, including extensions.
Part I: Early Distributions and Exception Codes
Complete Part I if you received taxable distributions before reaching age 59½ from an IRA, SEP-IRA, SIMPLE IRA, qualified employer plan, or modified endowment contract. Enter all early distributions on line 1, and verify your birth date confirms you had not attained age 59½ as of the distribution date.
2010 Exception Codes for Line 2
Enter the correct exception number on line 2 for early distributions not subject to the 10 percent tax:
- 01: Qualified retirement plan distributions received after separation from service in or after the year you reach age 55 (age 50 for qualified public safety employees). This exception does not apply to IRAs.
- 02: Distributions made as part of a series of substantially equal periodic payments made at least annually for your life or life expectancy, or the joint lives or joint life expectancies of you and your designated beneficiary. If the payments are from an employer plan, they must begin after you have separated from service.
- 03: Distributions due to total and permanent disability.
- 04: Distributions due to death. This exception does not apply to modified endowment contracts.
- 05: Qualified retirement plan distributions up to the amount you paid for unreimbursed medical expenses during the year, minus 7.5 percent of your adjusted gross income for the year.
- 06: Qualified retirement plan distributions made to an alternate payee under a qualified domestic relations order. This exception does not apply to IRAs.
- 07: IRA distributions made to unemployed individuals for health insurance premiums.
- 08: IRA distributions made for higher education expenses.
- 09: IRA distributions made for the purchase of a first home, up to $10,000.
- 10: Distributions due to an IRS levy on the qualified retirement plan.
- 11: Qualified distributions to reservists while serving on active duty for at least 180 days.
- 12: Other exceptions, including distributions incorrectly indicated as early distributions or distributions from a section 457 plan, not from a rollover. Use this code if more than one exception applies.
SIMPLE IRA Enhanced Penalty
If any portion of line 3 represents an early distribution from a SIMPLE IRA within the first two years of participation, calculate 25 percent of that amount instead of 10 percent and include it on line 4. This higher penalty applies only within the two-year SIMPLE IRA holding period in 2010. These distributions are included in boxes 1 and 2a of Form 1099-R and are designated with code S in box 7.
Part II: Education Account Distributions
Complete Part II if you included distributions from Coverdell education savings accounts or qualified tuition programs on Form 1040 or Form 1040NR, line 21, for 2010. Line 5 captures total distributions, while line 6 identifies amounts not subject to the 10 percent additional tax, including distributions for qualified education expenses, scholarships, or to a designated beneficiary upon death. Calculate 10 percent of the net excess on line 8 and include this amount on Form 1040, line 58, or Form 1040NR, line 56.
Parts III Through VII: Excess Contributions
Carryover from 2009
For each account type, including traditional IRA, Roth IRA, Coverdell ESA, Archer MSA, and HSA, enter the applicable line amount from your 2009 Form 5329 into the corresponding prior-year excess line for 2010.
● Enter line 16 from your 2009 Form 5329 on line 9 for traditional IRAs.
● Enter line 24 from your 2009 Form 5329 on line 18 for Roth IRAs.
● Enter line 32 from your 2009 Form 5329 on line 26 for Coverdell ESAs.
● Enter line 40 from your 2009 Form 5329 on line 34 for Archer MSAs.
● Enter line 48 from your 2009 Form 5329 on line 42 for HSAs.
If zero or no 2009 Form 5329 was filed, enter zero and proceed to the current-year excess contribution calculation.
Current-Year Excess Calculation
For 2010 contributions to each account type, determine whether you exceeded the maximum allowable contribution limit. Allowable limits vary by account type and filing status in 2010.
Reduce any excess with distributions made in 2010 and unused prior-year carryover amounts. Enter the net 2010 excess on the applicable line and calculate the 6 percent excise tax on the smaller of your excess contributions or the account value on December 31, 2010.
Part VIII: Required Minimum Distributions
You owe the additional tax if you did not receive the minimum required distribution from your qualified retirement plan, including an IRA or an eligible section 457 deferred compensation plan. The additional tax equals 50 percent of the excess accumulation, which is the difference between the amount required to be distributed and the amount actually distributed. The tax is due for the tax year that includes the last day by which the minimum required distribution is required to be taken.
IRA Distribution Requirements
You must start receiving distributions from your IRA by April 1 of the year following the year in which you reach age 70½. You can receive your entire interest in the IRA at that time or begin receiving periodic distributions that meet minimum requirements each year. Calculate the minimum required distribution by dividing the account balance of your IRAs on December 31 of the year preceding the distribution by the applicable life expectancy.
Qualified Retirement Plan Requirements
You must begin receiving distributions from your qualified retirement plan no later than April 1 following the later of the year in which you reach age 70½ or the year in which you retire. If you owned more than 5 percent of the employer maintaining the plan, you must begin receiving distributions no later than April 1 of the year following the year in which you reach age 70½, regardless of when you retire.
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This checklist is for educational purposes only and does not constitute tax or legal advice. Always review official IRS instructions and consult a qualified professional for guidance.
