Instructions

• 1). Assemble your tax forms for the year, particularly any 1099-R forms you were issued. The 1099-R form will list any withdrawals you have taken from your IRA account in any given year. Keep this number handy, as you will need it for your federal form 1040 when you file your taxes.
  
  
• 2). Determine whether the contributions to your IRA have been before-tax or after-tax. Usually, when you make a contribution to your IRA, you deduct the amount of the contribution on that year's taxes; this is what is known as a before-tax, or "deductible," contribution. If you did not take the deduction, your contribution is known as after-tax, or "non-deductible." Most IRA accounts consist solely of before-tax contributions; if your account also holds after-tax contributions, you will probably need the assistance of a tax adviser to file your taxes.
  
  
• 3). Follow the instructions on your federal Form 1040 when you file your taxes. On line 15a, you will enter the full amount of your IRA distributions for the year. On line 15b, you will enter the taxable amount of your IRA distribution. This amount should be listed on your 1099-R form; if it is not, refer to the federal filing instructions along with your Form 1040 to determine the taxable amount.
  
  
• 4). Determine whether you owe a penalty tax on your distribution. If you are under 59 1/2 at the time of your distribution, you may owe a penalty tax of 10 percent. Similarly, if you are over the age of 70 1/2 and have not withdrawn the required minimum distribution, you may owe a penalty tax of up to 50 percent of the amount not withdrawn. Follow the instructions on Form 5329 to determine the amount of any penalty tax you may owe, and enter this amount on line 57 of your Form 1040.