i am expecting the check from my ex's 401k within about 2 weeks. when will this money be taxed? and how much tax will i pay? do i need to put some aside to pay taxes with next year? i am not planning on rolling the money into my current 401k plan.
2006-08-09 08:31:56 · 7 answers · asked by lauryola 2 in Business & Finance ➔ Taxes ➔ United States
This from IRS publication 575...
Qualified domestic relations order (QDRO)
You may be able to roll over tax free all or part of a distribution from a qualified retirement plan that you receive under (QDRO). If you receive the distribution as an employee's spouse or former spouse (not as a nonspousal beneficiary), the rollover rules apply to you as if you were the employee.
As I read this, you should be able to receive the funds and put them into your p existing plan and not incur any tax liability. Still, I would suggest consulting your tax professional.
good luck
2006-08-09 10:06:33 · answer #1 · answered by Adios 5 · 0⤊ 0⤋
If you establish an ira account and roll the funds directly into this account, you'll avoid taxation. if you receive a distribution, it will be taxed in the year you receive it. be careful. it is smarter to roll it over and take money as you need it over time. defer the tax as long as possible. consult your tax advisor for details.
2006-08-09 19:51:46 · answer #2 · answered by ny2fl 2 · 0⤊ 0⤋
401k is consider as taxable income when you received it.
Usually alimony is tax deductible to the payor and taxable to the payee, child support is non tax deductable and not taxable.
In fact, there are some exceptions it all depends on your devioce settlement with your ex, you better consult your lawyer and tax advisor.
2006-08-09 16:54:42 · answer #3 · answered by tw9812 1 · 0⤊ 0⤋
I wouldn't take the advice from Yahoo! answers - who knows who you are talking to.
Talk to your divorce attorney or a reliable tax person. They will not charge you alot (especiall the tax person may not charage at all ) but it will likely be cheaper than bad advice or not knowing.
2006-08-09 15:37:52 · answer #4 · answered by Anonymous · 0⤊ 0⤋
i did mine it i got whacked 30 % plus addition 10 % penalty. i was young and stupid and didn't care.if its alot i would consult a CPA for advise,you don't want to hand off the government that much money for no reason,even if it did come from your ex.
2006-08-09 15:43:35 · answer #5 · answered by snoogans 5 · 0⤊ 0⤋
i dont know but what happened why are you getting his 401k
2006-08-09 15:35:03 · answer #6 · answered by Anonymous · 0⤊ 0⤋
better consult with your lawyer and tax consultant.
2006-08-09 15:51:17 · answer #7 · answered by prince47 7 · 0⤊ 0⤋