Reporting Distributions

Reporting Early Distributions for Education Expenses
You should expect the payer of your IRA distribution to send you Form 1099-R, Distributions From
Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. In general, distributions from any pensions, annuities, profit-sharing and
retirement plans (including section 457 state and local government plans), IRAs, insurance contracts, etc., are reported to recipients on Form 1099-R. For informational
purposes only, the IRS makes a copy of it available here: www.irs.gov/pub/irs-pdf/f1099r.pdf This form will help to determine how much of your distribution will fall under
the 10% additional tax and how much will be taxed for income tax purposes.

Early distribution recipients must use Form 1040 to report the taxable earnings – specifically on line 15b (or 16b on 1040NR). Form 5329 is then used to report how much
(if any at all) is subject to the 10% additional tax if you qualify for an exception for qualified higher education expenses. Form 5329 is available here:
www.irs.gov/pub/irs-pdf/f5329.pdf and the instructions are available here: www.irs.gov/pub/irs-pdf/f5329.pdf.

For your information, the first set of instructions from Form 5329 is as follows:

Who Must File
You must file Form 5329 if any of the following apply, except you do not have to file Form 5329 to report a qualified disaster recovery assistance
distribution.

• You received an early distribution from a Roth IRA, the amount on line 23 of Form 8606, Nondeductible IRAs, is more than zero, and you are required to enter
  an amount that is more than zero on Form 5329, line 1 (see Exception for Roth IRA Distributions on page 2).

• You received an early distribution subject to the tax on early
  distributions from a qualified retirement plan (other than a Roth IRA) and distribution code 1 is not shown in box 7 of Form 1099-R, Distributions From Pensions, Annuities,
  Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. Note. You do not have to file Form 5329 if distribution code 1 is correctly shown in box 7 of all
  Forms 1099-R and you owe the additional tax on each Form 1099-R. Instead, see the instructions for Form 1040, line 58, or Form 1040NR, line 54, for how to report the
  additional 10% tax directly on that line.

• You meet an exception to the tax on early distributions and distribution code 1 is shown in box 7 of Form 1099-R.
• You meet an exception to the tax on early distributions from the list on page 3 but box 7 of your Form 1099-R does not indicate an exception or the exception does not apply to the
  entire distribution.

• You received taxable distributions from Coverdell ESAs or QTPs.
• The contributions for 2009 to your traditional IRAs, Roth IRAs, Coverdell ESAs,
  Archer MSAs, or HSAs exceed your maximum contribution limit, or you had a tax due from an excess contribution on line 17, 25, 33, 41, or 49 of your 2008 Form 5329.

• You did not receive the minimum required distribution from your qualified retirement plan. However, for 2009, you are not required to take a minimum distribution from your defined
  contribution plan or IRA. See Waiver of required minimum distributions for 2009 on page 6 for more information.

Source: www.irs.gov/pub/irs-pdf/i5329.pdf

Some other situations in which Form 5329 is required exist. For example, if other distributions occurred from an IRA or qualified retirement plan, or you made extra contributions to
tax favored accounts, then the IRS directs you to read the instructions on line 58 (Form 1040) or line 54 (Form 1040NR) to see if you need to file Form 5329.

Line 58, Form 1040:

Source:www.irs.gov/pub/irs-pdf/f1040.pdf

Source:Line 54 Form 1040NR:

www.irs.gov/pub/irs-pdf/f1040nr.pdf