What is IRS Form 5329?
IRS Form 5329 must be filed by individuals who incurred tax liability due to improper handling of IRA and other retirement accounts. Such mishandling includes early distributions from IRAs; if this is the only such infraction, this form may not be required. Excess contributions to IRAs and other retirement accounts must be accounted for on this form, as must excess accumulations in qualified retirement plans. Improper use of educational savings accounts must also be accounted for on this form. These infractions are penalized by a percentage of the excess distribution or contribution.
