Tax Tips From Tony Navarro

Tuesday, March 23rd, 2010 at 8:00 am

This is the fourth of 7 tips on tax preparation from Tony. Check back each Tuesday to read them all.

Tip Number Four: Early Distributions from Retirement Plans • Early distributions are funds taken from IRAs before age 59½. • They are subject to an added 10% tax. • They must be reported to the IRS. • Distributions rolled over to another IRA are not taxed. • Rollovers must be done within 60 days after you receive the distribution. • Rollovers are taxed when the new plan makes a distribution. • Early distributions from nondeductible IRA contributions are not taxed. • Early distributions from Roth IRAs are not taxed. • Non-IRA plan distributions are taxable unless contributions were after tax. • Among exceptions to the early distribution tax are when it is used for first home purchases, medical or educational expenses, or if disabled.

Tony Navarro, UCLA, B.A, Economics, 1990: Investment Consultant since 1992; Tax Preparation since 1996 tax year; IRS Audit Representation; IRS-designated Enrolled Agent; Investment Advisor LPL; Notary Public; Bookkeeping Services. 12803 Venice Boulevard • Mar Vista, CA 90066 (310) 398-3231 • tony@taxplusla.com http://www.taxplusla.com