A retirement fund is a smart financial decision to help offset the costs associated with life after employment. However, situations can occur that require you to withdraw some cash earlier than you expected from your savings plan. In this way, you can activate an additional tax and report withdrawals to the IRS. The following facts refer to early withdrawals from pension funds and can help you to file taxation times. Early withdrawal is defined as any money removed before the age of 59 1⁄2 from the pension savings. Any withdrawals during the fiscal year have to be reported to the IRS. You will probably have to pay income tax on the money you have received and you can pay an additional 10% withdrawal tax. However, this additional tax is not applicable to withdrawals which are not taxable. If you withdraw the amount you cost to participate in the pension plan, including all previously taxed contributions before you are added to the plan, you will not have to pay tax.   

Another tax free withdrawal is a roll-out. Rollovers take place when you move your assets from one plan to the next. You usually have a period of sixty days to move your assets to the second plan after they have been withdrawn from the original fund. The rules for pension plans and IRAs are different, but there are exceptions to paying the additional 10% withdrawal tax. In addition to your regular return, early withdrawals require the filing of Form 5329, additional charges on qualified plans (including IRAs) and other favored tax accounts.