Form 5329 (2013) Filing Checklist for 2013 Returns

Purpose and scope

Form 5329 for tax year 2013 is used to calculate additional taxes under federal tax laws that apply to qualified retirement plans, Individual Retirement Arrangements, and other tax-advantaged accounts. It reports penalties for early distributions, excess contributions, and missed required minimum distributions when these items are not fully resolved through Form

1040 reporting.

The form applies only to 2013 activity and must be filed using the 2013 version, even if submitted with a later-year return or as a standalone filing. Each taxpayer completes a separate

Form 5329, including spouses filing jointly.

Overview of taxes reported on Form 5329 (2013)

Form 5329 covers multiple excise tax regimes affecting tax-favored accounts, including early distributions from qualified plans and IRAs, excess IRA contributions, and missed minimum required distributions. Each part of the form applies only if the taxpayer’s facts trigger that specific additional tax.

The form interacts with other IRS forms and publications, including Form 1040, Publication

590-A, Publication 590-B, and Publication 575. Accurate coordination prevents duplicate reporting or incorrect penalty calculations.

Ten-step checklist

1. Step 1: Confirm whether Form 5329 is required

   Form 5329 is required when additional taxes apply to early distributions, excess contributions, or minimum required distributions, or when an exception must be claimed that is not properly coded on Form 1099-R. It may also be filed as a standalone return when no income tax return is otherwise required.

   Each spouse with a reportable issue must complete a separate Form 5329, even when filing a joint tax return. The resulting additional taxes are combined on the applicable income tax return.

2. Step 2: Identify early distributions subject to additional tax

   Early distributions generally include taxable amounts withdrawn before age 59½ from qualified retirement plans, traditional IRAs, Roth IRAs, or inherited retirement accounts subject to penalty

   rules. These amounts are evaluated under Part I to determine whether the 10 percent additional tax applies.

   Only the portion included in taxable income is entered, not the gross distribution reported by the

   IRA custodian. Special rules apply for Roth IRA ordering and certain qualified retirement accounts.

3. Step 3: Apply exceptions to early distribution penalties

   Part I also reports exceptions to the additional tax, including disability, death, qualified higher education expenses, first-time homebuyer distributions, and certain medical expenses exceeding the applicable AGI threshold. Each exception is identified using the correct numerical code.

   Documentation supporting the exception should be retained, including medical bills, education expense records, or unemployment compensation statements. The excluded amount reduces the portion of the amount subject to the excise tax.

4. Step 4: Compute the additional tax on early distributions

   After subtracting exception amounts, the remaining taxable distribution is multiplied by the applicable rate, generally 10 percent under federal tax regulations. SIMPLE IRA distributions within the first two years may be subject to a higher rate.

   The calculated tax flows from Form 5329 to the appropriate line on Form 1040 for the 2013 tax year. This ensures proper integration with the overall tax liability.

5. Step 5: Report taxable education account distributions

   Part II applies when taxable distributions are taken from education savings accounts, including

   Coverdell Education Savings Accounts and 529 plan arrangements, and are included in income.

   Only the taxable portion is evaluated for the additional tax.

   Amounts qualifying for education-related exceptions are excluded, and the remaining balance is subject to the 10 percent tax. Education distributions are not reported in the excess contribution sections.

6. Step 6: Calculate excess contributions to traditional IRAs

   Part III applies when contributions to traditional IRAs exceed the 2013 limit, including prior-year excess amounts carried forward. The annual contribution limit depends on age and compensation.

   Uncorrected excess contributions are subject to a six percent excise tax for each year they remain in the account. Timely corrective withdrawals may eliminate or reduce the penalty.

7. Step 7: Calculate excess contributions to Roth IRAs

   Part IV applies to excess Roth IRA contributions, including carryovers from earlier years that remain uncorrected during 2013. Income limits and contribution caps must be reviewed carefully.

   The six percent excise tax continues annually until the excess is corrected or absorbed by available contribution room. Roth IRA excess rules differ from traditional IRA rules and must be calculated separately.

8. Step 8: Address Coverdell ESA excess contributions

   Part V applies when a beneficiary's total Coverdell ESA contributions exceed the 2013 annual limit. Modified AGI limitations may also restrict allowable contributions.

   The 6% excise tax is computed on excess amounts remaining at year-end. Taxable Coverdell distributions are not reported in this section.

9. Step 9: Review Archer MSA and HSA excess contributions

   Parts VI and VII apply to Archer medical savings accounts and health savings accounts when contributions exceed statutory limits. These parts are completed only if excess amounts exist.

   Excess contributions are subject to a six percent excise tax until corrected. Coordination with

   Forms 8889 or other reporting may be required.

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10. Step 10: Report missed required minimum distributions

    Part VIII applies when the minimum required distributions from qualified retirement accounts were not fully withdrawn for 2013. The shortfall is subject to a 50 percent excise tax.

    A penalty waiver request may be made if the failure resulted from a reasonable error and corrective steps were taken. Supporting explanations should be retained with tax records.

    Final review and filing considerations

    Confirm the correct 2013 version of IRS Form 5329 is used and that each applicable part is completed accurately. Verify consistency with Form 1040, Form 1040-SR, and related pension or annuity income reporting.

    Form 5329 is filed by the normal tax-filing deadline, including extensions, and may be attached to an income tax return or filed independently. Retain copies with other tax returns and supporting documentation.

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