Tax Law (Questions About Taxes)/Early retirement penalty

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Question
Hi Mr. Stencil. I have a rather complicated question. I resigned from my job at a public school district earlier this month as I have had serious issues with chronic kidney problems. Because I have no other options, I have to take an early withdrawl from my retirement account. I only made about 11,000 this year before I resigned and I filed single zero dependents.

I know my retirement will be about 15,000 (that includes a 20% federal tax). It is my understanding there is also a 10% penalty tax associated with an early withdrawl. I have read enough to know there are some exceptions to this penalty. This year I will have to pay 3500 in COBRA premiums. I also paid about 3000 in tuition.

Can you give me any insight as to where I may stand in regards to paying the penalty?

Thank you.

Answer
Sherri,

Thanks for your question. I recently wrote a blog article on this exact topic. This is a link to the blog.https://www.taxconnections.com/taxblog/exceptions-to-the-10-early-withdrawal-penalty/

Of the exceptions, you may qualify under the medical expenses, insurance premium, or age.

Hope this helps.

John Stancil, CPA

Tax Law (Questions About Taxes)

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John Stancil, CPA

Expertise

I can answer questions on personal income taxes, partnerships, and some corporate income taxes. I can deal with some state tax questions. Limited gift and estate tax questions. I am also familiar with ministerial and church tax reporting issues. I am Professor Emeritus at Florida Southern College. Sales taxes and property taxes are state and local issues so I am not likely be be able to give you an in depth answer on those types of taxes. I have maintained a CPA practice, specializing in tax, for over 35 years. I am a member of the National Association of Tax Professionals, The Florida Insititute of CPA's, The NCPE Fellowship. In addition I am a Certified Mentor for SCORE. Visit my website at www.mybaldcpa.com. I also offer seminars and consultations to churches and clergy on their tax issues at www.churchtaxsolutions.com Also visit my blog, www.thetaxdocspot.com. I am listed on Tax Connections at https://www.taxconnections.com/profile/John-Stancil/12258973 Prepare and file your own taxes at www.1040stancilcpa.com

Experience

I hold a doctorate in Accounting, and am a CPA. My certifications of CIA, CFM, and CMA are inactive. I passed all certification examinations on the first attempt, and received honorable mention for my scores on the CIA exam. I have operated a CPA firm for over 37 years and have taught accounting and tax at the college level for over 35 years.

Organizations
FICPA, NATP, NCPE Fellowship, Lakeland Business Leaders

Publications
The CPA Journal, Florida CPA Today, Green Consumer, Green Business, Global Sustainability as a Business Imperative, Palmetto Review, NATP TaxPro Quarterly, Mustang Journal of Finance and Accounting.

Education/Credentials
DBA University of Memphis MBA University of Georgia BS in Accounting Mars Hill University

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