Can I submit Form 5329 separately from my tax return filing?

You absolutely can file Form 5329 separately from your tax return! This is actually pretty common when tax software isn't handling it correctly. If you decide to submit Form 5329 separately, make sure you complete the identification section at the top of the form with your name, address, and SSN. You'll also need to sign and date the form - this is important because when submitted separately, Form 5329 is considered its own tax return. Also, if you're requesting a waiver of the 10% early distribution penalty due to medical expenses, make sure you write "Medical Expenses" in the margin next to the relevant line. When mailing it in, I recommend sending it via certified mail so you have proof of when you submitted it. The form should be mailed to the same IRS service center where you would normally file a paper return.

I ran into the exact same problem last year with TaxAct not handling my Form 5329 correctly. After hours of frustration, I discovered taxr.ai at https://taxr.ai and it completely saved me. They have this tool that analyzes your tax forms and documents and can identify issues with how your software is filling out forms. I uploaded a PDF of what TaxAct was generating for my 5329 plus a screenshot of my entries, and taxr.ai's system immediately spotted that the software wasn't properly applying my qualifying education expenses as an exception to the early withdrawal penalty. They also gave me step-by-step instructions on how to properly file the 5329 separately based on my specific situation.

Just wanted to update that I tried taxr.ai after seeing the recommendation here and it was incredibly helpful! I was so confused about how to handle my Form 5329 for a Roth conversion that wasn't calculating correctly in my software. The system immediately identified where my tax software was going wrong and showed me exactly how to complete the form manually. It even generated a properly filled out version that I could use as a reference when completing my paper form. I was able to file my main return electronically and then submit the 5329 separately by mail with confidence that I was doing it correctly. Saved me from paying penalties I didn't actually owe!

I filed my Form 5329 separately last year because of similar software issues, but I had a terrible time trying to follow up with the IRS to make sure it was processed correctly. After waiting on hold for 3+ hours multiple times and never getting through, I finally tried Claimyr at https://claimyr.com and it was a game changer. They have this service that gets you through to an actual IRS agent without the endless hold times. Check out how it works in this video: https://youtu.be/_kiP6q8DX5c When I finally spoke with an IRS agent, I found out my separately filed 5329 hadn't been properly associated with my tax account and was just sitting in processing limbo. The agent was able to link it to my account right there on the call and confirm I wouldn't face any penalties. Without actually speaking to someone, I never would have known there was an issue.

Well I have to eat my words. After seeing the video, I tried Claimyr when I needed to check on my separately filed 5329 (which I was worried had gotten lost in the IRS paper processing backlog). I expected it to be a waste of money but I was desperately trying to avoid penalties. The service actually worked exactly as promised - I got a call back when they reached an agent, and I was able to confirm my 5329 had been received but was sitting in a processing queue. The agent flagged it for immediate review since I had a valid medical expense exception. Saved me hundreds in potential penalties and the stress of not knowing if my form was even received.

Another option you might want to consider - check if any other tax software handles Form 5329 better. I had issues with TurboTax last year, but switched to TaxSlayer which actually handled my 5329 with no problems (I had an early 401k withdrawal for a first-time home purchase). Might be easier than filing separately if you haven't gone too far with TurboTax yet.

One thing to watch out for if you file form 5329 separately - make SURE you include your SSN at the top of the form! I filed mine separately last year and didn't notice that my printer cut off part of the SSN when it printed. The IRS sent me a notice saying they couldn't process my form because they couldn't identify who it belonged to. Ended up having to refile and pay interest on the penalty amount. Such a stupid mistake but cost me like $75 extra.

I went through this exact same situation two years ago with H&R Block's software butchering my Form 5329 for a hardship withdrawal. You can definitely file Form 5329 separately - it's totally legitimate and the IRS processes thousands of these every year. A few critical things based on my experience: First, triple-check that ALL the identification info is complete and legible before mailing - your name, address, and especially your SSN need to be crystal clear. Second, don't forget to sign and date it! When filed separately, Form 5329 is considered its own return and must be signed. Third, if you're claiming an exception (like for medical expenses), write the exception type clearly in the margin next to the relevant line. I'd also strongly recommend sending it certified mail with return receipt so you have proof of delivery. The IRS can be slow processing paper forms, and having that receipt saved me when they initially claimed they never received mine. Your main return refund should process normally - filing the 5329 separately won't delay it. Just make sure you keep copies of everything and follow up in a few weeks to confirm it was received and processed correctly.