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Use Form 5329 to report additional taxes on IRAs, other qualified retirement plans, modified endowment contracts, Coverdell ESAs, QTPs, Archer MSAs, or HSAs.
You may need this form in three situations: early distributions from a tax-favored account. excess contributions to a tax-favored account. failing to take required minimum distributions.
You can deduct the penalty (even if it is more than your interest income) on Form Schedule 1, line 17. Form 1099-OID displays the interest or principal forfeited in box 3 as the early withdrawal penalty.
Form 1099-R is used to report the distribution of retirement benefits such as pensions and annuities. You should receive a copy of Form 1099-R, or some variation, if you received a distribution of $10 or more from your retirement plan.
File Form 5329 with your 2023 Form 1040, 1040-SR,1040-NR, or 1041 by the due date, including extensions, of your tax return. If you dont have to file a 2023 income tax return, complete and file Form 5329 by itself at the time and place you would be required to file Form 1040, 1040-SR, or 1040-NR.
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Individuals who fail to take the required minimum distribution (RMD) from their qualified retirement accounts, such as a 401(k) or traditional IRA, may use Form 5329 to report and calculate any associated penalties.
Timely corrections must be reported in the year of the withdrawal on IRS Form 1099-R. Any earnings will be included as taxable income in the year you made the excess or non-deductible contribution. For more on reporting, see the instructions for IRS Form 1040, 5329, and 8606.

2021form 5329