mircpa Posted April 20, 2020 Report Share Posted April 20, 2020 Hello all Client withdraw all money from plan to use for non education purpose due to bad financial situation & utilized for personal purpose. Received 2019 1099-Q. I am reporting 19K earning from line 2 of 1099-Q in 1040 other income & including form 5329 for 10% penalty on earnings portion. 1099-Q line 1 reads 213K, line 2 reads 19K & line 3 reads 193K. Started contributing to this plan from 2014 until 2018. I went back added up all amount claimed as deduction in previous years IL tax returns & included in current year 2019 Sch M as addition to income in IL 1040. Can someone confirm my position. Thanks for your help. Quote Link to comment Share on other sites More sharing options...
DANRVAN Posted April 20, 2020 Report Share Posted April 20, 2020 18 hours ago, mircpa said: Client withdraw all money from plan to use for non education purpose due to bad financial situation & utilized for personal purpose. So no funds used for educational purposes in the past? Agree earnings fully taxable and subject to 10 penalty. Also your calculation of distributions taxed at your state level is consistent with treatment in my state. Quote Link to comment Share on other sites More sharing options...
mircpa Posted April 21, 2020 Author Report Share Posted April 21, 2020 Thanks @DANRVAN Quote Link to comment Share on other sites More sharing options...
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