- 1). Request a withdrawal from your bank or other financial institution that has your tax-deferred IRA. Your financial institution cannot prevent you from taking a distribution at any time.
- 2). File Form 5329 with your income taxes to determine your penalty if you take your distribution before age 59 1/2. If you have an early withdrawal exemption reason -- such as medical expenses above 7.5 percent of your adjusted gross income, post-secondary expenses or a permanent disability -- document the exception on the form and the Internal Revenue Service waives the penalty.
- 3). Copy the amount of your penalty, if any, onto line 58 of your Form 1040 tax return. This amount adds to your tax liability for the year.
- 4). Report the amount of your withdrawal as a taxable IRA distribution on your income tax return. You must use either Form 1040 or Form 1040A to file your taxes if you have a tax-deferred IRA distribution. This amount counts as taxable income.
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