Your Advisor's Thoughts

Did You Take An Early Distribution From Your Retirement Plan?

If you took or will take an early distribution from your retirement plan in 2011 you should be aware that there is a potential tax impact. Here are ten facts about early distributions.

1. Payments you receive from your Individual Retirement Arrangement (IRA) before you reach age 59½ are generally considered early or premature distributions.
2. Early distributions are usually subject to an additional 10 percent tax.
3. Early distributions must be reported to the IRS and on your income tax return.
4. Distributions you rollover to another IRA or qualified retirement plan are not subject to the additional 10 percent tax if you complete the rollover within 60 days after the day you received the distribution.
5. The amount you roll over is generally taxed when the new plan makes a distribution to you or your beneficiary.
6. If you made non-deductible contributions to an IRA and later take early distributions from your IRA, the portion of the distribution attributable to those non-deductible contributions is not taxed.
7. If you received an early distribution from a Roth IRA, the distribution attributable to your prior contributions is not taxed.
8. If you received a distribution from any other qualified retirement plan, generally the entire distribution is taxable unless you made after-tax employee contributions to the plan.
9. There are several exceptions to the additional 10 percent early distribution tax, such as when the distributions are used for the purchase of a first home, for certain medical or educational expenses, or if you are disabled.
10. For more information about early distributions from retirement plans, the additional 10 percent tax and all the exceptions see IRS Publication 575, Pension and Annuity Income and Publication 590, Individual Retirement Arrangements (IRAs). Both publications are available at IRS.gov or by calling 800-TAX-FORM (800-829-3676).

Early distribution rules are not the same for the IRS and the state taxing authorities. If you took an early distribution from a retirement account in 2011, you will receive Form 1099-R reporting the amount of the distribution. You must include Form 1099-R along with a record of the total of your contributions to the retirement account and all previous distributions from the retirement account with your tax preparation documents.

If you have questions about an early distribution and would like to discuss the possible tax implications call us at 610-485-1010 or e-mail Jackie at jward@ybifs.com.

Stay tuned for more…

This information is provided by Jacqueline M. Ward, the Tax Operations Manager at "Your Best Interest" Financial Services, Inc. She combines her education in accounting, years of experience and attention to detail to provide her clients with confidence and peace of mind that their tax returns are completed accurately and in a timely manner. Jackie is the mother of 7 children, 2 girls and 5 boys. Two of her sons are presently serving our country in the military; one in the U.S. Marine Corps and the other is a midshipman at the United States Naval Academy.

Securities offered through Trustmont Financial Group, Inc., Member FINRA/SIPC

Advisory services offered through Trustmont Advisory Group, Inc.

200 Brush Run Road, Greensburg, PA 15601 724-468-5665

Neither "Your Best Interest" Financial Services Inc. nor 401kPro are affiliated with either Trustmont Financial or Trustmont Advisory Group, Inc.

September 11

Ten years have passed since the events of 9/11/01, and while in some ways it feels like a lifetime ago, the memory remains painfully fresh in our minds.

An attack on U.S. soil. The loss of nearly 3,000 lives. In the wake of these horrific events, we might have recoiled. We were all wounded that day, but the people of this nation rallied together, and in the decade that has followed, we've proven our strength, our courage and our resilience.

Let us never forget the events of 9/11.

This coming Sunday, Patriot Day, let us remember the thousands of precious lives that were lost that fateful day, as well as the lives of those we've lost since then - the brave men and women of the armed forces who fight for us each and every day.

9/11 is a wound that may never fully heal - like the wound we sustained at Pearl Harbor, but those wounds, though deep, make us stronger.

Our thoughts and prayers this week are with all those who lost family members and loved ones on that day, and in the subsequent years of military action.

GOD BLESS AMERICA!

Phil Giambri and Greg Teal

You can contact Phil and Greg at the office by calling 610-485-1010

Philip M. Giambri is the founder, and owner of “Your Best Interest” Financial Services Inc. Phil is a registered representative of Trustmont Financial Group Inc. Member FINRA, SIPC. Greg is an investment advisor representative of Trustmont Advisory Group, Inc. 200 Brush Run Road, Greensburg, PA 15601, 724-468-5665