Form 5329 - 2019 Tax Year Checklist
Purpose and Scope
This checklist explains how Form 5329 for tax year 2019 is used to report additional taxes tied to qualified retirement plans, Individual Retirement Arrangements, and other tax-advantaged accounts under federal tax laws. It focuses on early distributions, excess contributions, minimum required distributions, and common situations where IRS Form 5329 is required.
Form 5329 may be filed with Form 1040 or filed separately when no income tax return is otherwise required. The filing obligation depends on account activity during the tax year and how amounts were reported to the Internal Revenue Service.
When Form 5329 is Required
Form 5329 is required when additional taxes apply to tax-favored accounts or when an exception must be claimed because Form 1099-R does not correctly reflect the correct tax treatment. This includes early distributions, excess IRA contributions, and excise tax related to minimum distributions.
In limited cases, Form 5329 is not required when all early distributions are correctly coded, and the full additional tax is reported directly on the income tax return. Careful review of tax regulations is necessary before skipping the form.
Ten-Step Checklist
Step 1: Confirm filing requirements for 2019
Determine whether early distributions, excess contributions, or missed minimum required distributions occurred during the tax year. Review Forms 1099-R, IRA custodian statements, and retirement account records to identify any taxable distributions requiring additional taxes.
If spouses file jointly, each individual completes a separate Form 5329 for their own qualified retirement accounts. The results are then combined on the joint tax return.
Step 2: Identify the applicable Form 5329 part
Match the issue to the correct Form 5329 section to avoid misreporting additional taxes. Early distributions are reported in Part 1, excess contributions to traditional IRAs in Part 3, and Roth
IRA excess contributions in Part 4.
Education savings accounts, ABLE accounts, Archer MSA, and Health Savings Account issues use other parts of the form. Selecting the wrong part often leads to IRS penalty notices or processing delays.
Step 3: Determine early distributions included in income
For Part 1, enter only early distributions included in taxable income, not the total gross distribution shown on Form 1099-R. Roth IRA distributions require special analysis using Form
8606 and applicable ordering rules.
Distributions from pensions, annuities, or inherited IRA accounts should be reviewed carefully.
Only amounts subject to tax are considered when computing additional taxes.
Step 4: Apply valid exceptions to early distribution taxes
If an exception applies, exclude the qualifying amount on Part 1, line 2, and enter the correct exception code. Exceptions vary by plan type and may apply differently to IRAs and employer-sponsored qualified plans.
Medical expenses and education-related exceptions require supporting documentation. Retain records with other tax returns in case the Internal Revenue Service requests verification.
Step 5: Calculate the additional tax on early distributions
Compute the amount subject to additional taxes by subtracting exceptions from taxable early distributions. Apply the standard 10 percent rate unless a higher SIMPLE IRA rate applies within the first two participation years.
Carry the calculated additional tax to the appropriate line on Form 1040. Confirm consistency with other reported retirement income and tax credits.
Step 6: Identify excess contributions to traditional IRAs
Use Part 3 to report excess contributions to traditional IRAs, including carryovers from prior years. Contribution limits depend on age, compensation, and federal tax laws applicable for
2019.
Corrective withdrawals completed by the tax filing deadline may reduce excise tax exposure.
Earnings withdrawn with excess contributions may still affect taxable income and early distribution rules.
Step 7: Identify excess contributions to Roth IRAs
Use Part 4 to report Roth IRA excess contributions and prior-year carryovers. Income limitations and contribution limits must be reviewed carefully to determine whether an excess exists.
The excise tax is based on the smaller of the excess amount or the year-end account value.
Documentation from the IRA custodian should support reported figures.
Step 8: Address education, ABLE, and medical savings accounts
Coverdell ESAs, ABLE accounts, Archer medical savings accounts, and Health Savings
Accounts may trigger additional taxes when contributions exceed limits or distributions are taxable. Each account type follows separate reporting rules within Form 5329.
Ensure the correct part is completed, and year-end values are accurate. Forms such as Form
8853 may be required for certain Archer MSA situations.
Step 9: Report missed minimum required distributions
Part 8 applies when a required minimum distribution was not fully taken from a retirement account in 2019. The excise tax is generally 50 percent of the undistributed amount unless penalty waiver relief is granted.
Waiver requests require evidence of reasonable error and prompt corrective action. Retain proof of corrective distributions and correspondence with the IRA custodian.
- Full IRS transcript retrieval (Wage & Income + Account)
- Professional tax form review
- Preparation & filing support
- Tax relief options if you owe the IRS
Step 10: Final review and filing
Confirm all applicable Form 5329 parts are completed using the correct 2019 line references.
Verify amounts align with Forms 1099-R, Form 8606, and other supporting tax forms.
File Form 5329 with the income tax return or separately if no return is required, following the applicable tax filing deadline. Maintain copies of these documents with other tax documents for future reference.
Final Review Considerations
Ensure the correct tax year version of Form 5329 is used and that early distributions, excess contributions, and minimum distributions are reported in the proper sections. Review the IRS website guidance and publications for any updates affecting 2019 reporting.
Accurate preparation helps reduce IRS penalty exposure and processing delays. When uncertainty exists, consulting tax professionals or authoritative guidance can help ensure compliance with federal tax regulations.
If you’re missing tax documents or want to ensure the numbers you enter match IRS records, we can help.
