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Dear Community,
My clients' took early Retirement distributions to cover their children's adoption, education costs and pay their prior tax liabilities.
The distribution code is 1 - distribution is not exempt.
However, my clients' took out the funds for purposes that qualify for the distribution to be exempt from the 10% penalty.
What kind of documentation would you request to support the expenses?
Thanks in advance!
		
			
				
						
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			George4Tacks
		
		
		
		
		
		
		
		
	
			
		
		
			
					
		
	
	
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Documentation needed would be everything to show the trail of the money with receipts for those qualifying expenses.
https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-exceptions-to-tax-o... may help to clarify which expenses qualify.
Answers are easy. Questions are hard!