pk7 Posted January 12, 2012 Report Share Posted January 12, 2012 In 2003 I opened my first Roth. In 2007 I opened a second Roth and contributed $5,000. In 2009 I withdrew the $5,000 contribution from the second $5,000 Roth. The brokerage coded the 1099R with a J (which I think may be incorrect). Now the IRS wants $500 in tax plus interest. Is it not true that one can withdraw original contributions (not including earnings) at ANY TIME tax free (even before age 59.5)? I see that stated on many websites but need 1) a reference to that rule in an IRS publication and 2) how do I convince the IRS that it was a return of original contribution and therefore should not be taxed? The brokerage is claiming they coded it correctly. Quote Link to comment Share on other sites More sharing options...
jainen Posted January 12, 2012 Report Share Posted January 12, 2012 >>a reference to that rule in an IRS publication<< That particular rule ("ordering rule") is stated on page 64 of Pub 590 at http://www.irs.gov/p...s-pdf/p590.pdf. Read the whole of Chapter 2 because there are other rules such as "qualified distributions" that seem to apply to your situation. Also see the instructions to Form 5329 at http://www.irs.gov/p...s-pdf/i5329.pdf (Line 2 Code 12). Your second question is moot because IRS is not taxing you on the original contribution. They are assessing an additional tax because the broker says it was an early distribution. Quote Link to comment Share on other sites More sharing options...
ed_accountant Posted January 12, 2012 Report Share Posted January 12, 2012 PK7, Are you an ATX User or a Tax preparer? I believe this board is for ATX users and tax preparers. You should seek the advise a qualified tax preparer in your local area. Quote Link to comment Share on other sites More sharing options...
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