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Friday, January 25, 2008
Way Down in the Hole
Speaking of taxes and government, I got my PERS 1099 statements yesterday. Note the plural. I got two tax statements from PERS. I had forgotten that the year between one's 59th and 60th birthday marks a special occasion in tax land. About half way through you turn 59.5 years old. That magic point marks the crossover point where you are no longer subject to the IRS's special hell for taking "early distributions" of retirement income. In PERS-land, this event is marked by getting two 1099 forms. One form has Box 7 marked with a "7", which means "normal distribution" (i.e. you've reached official IRS retirement age and you can withdraw without a penalty). The other 1099 has box 7 marked with a "2), which means that you were subject to "early distribution" rules. It hardly matters when one is taking a PERS pension plus an annuity, but the IRS keeps track of these sorts of things. So now I'm street legal; I am really old enough to retire. If you get two 1099R's from PERS this year, you might have turned 59.5 sometime during the year; otherwise, you may be getting a variable distribution. If you got two for any other reason, it might be that PERS just likes to play with your head. Have fun doing your taxes. I'm having a blast doing mine. The AMT has only cost me $7000 so far this year. If I'm lucky, I can keep it under $10,000. Way down in the hole.