Do I have to claim 401k payout I received? I payed out the a**!!?

Answer 1

When your employer contributes to your account, no.

When you withdraw from your account, yes. If you're not old enough to begin withdrawing, you'll end up paying taxes on what you took out plus a penalty.

(Shannon is also right. Check to see what kind of plan you have with your employer. The easiest way to tell is to look at your W-2. If your 401k money was not taxed, it will be subtracted from your taxable income but not your social security income, and the 401k amount will be in box 14 with a code "d" in front of it. The nontaxed retirement accounts are the one's you get penalized for when you withdraw early.)

Answer 2

Yes you have to claim it...here's step by step on what you need to do.

At end of January you will receive a 1099-R for the amount that you received (assuming $$ was paid to you last year, the 1099-R will show a "distributable amount", a "taxable amount", and a "amount withheld". You enter the distributed amount on line 16a of the 1040. You enter the taxable amount on line 16b of the 1040. That amount gets added to your wages for the year.

Now to the withholding...they already took 20% from your account balance and submitted it to the IRS. This is mandatory...and it's because everyone would go...but but but I didn't know and not be able to pay their tax bill. This amount is shown on your 1099 and gets added in to the amounts withheld on your w-2's on line 64 of the 1040.

Lastly, you likely have the 10% tax. If you took it out before age 59 1/2 (or in some cases age 55) then you probably owe the government a 10% excise tax (no it's not a penalty). On line 60 of the 1040 you put in the 10% of your distribution and that amount gets added to your other tax. Hope you accounted for it because you might owe taxes now.

You have to attach your 1099-R AND the maybe the Form 5329 to your return. Check instructions (or better yet use Turbo Tax for your return).

Good luck!

Answer 3

Yep. When you prematurely take out of a 401K they hit you with the kitchen sink. There are penalties and then taxes. By tapping into you future-I don't wanna eat Alpo-money, you will pay about 30% to the government. Yep, about 30%. You should tap these funds early only for extreme life and death type emergencies.
Now, that being said, I thought they would take the taxes out before you even got the funds. Is that what you mean?? .

I was curious and called my retirement people. They weren't exactly sure what you report the following year. But, they did state that you would get a form that you would use for the next tax return. That sounds like reporting it in some way to me. In other words, the taxmen hits you, the penalties hit you and the next year the taxmen probably hit you again.

Answer 4

Yes you do. You haven't paid taxes on it yet, so will have to report it on your return and pay the taxes due. If you're under 59-1/2, there will be a 10% penalty on the taxable amount withdrawn in addition to regular taxes.

Any taxes that were withheld from the withdrawal will go on your 1040 along with any withholding from your paychecks.

If you withdrew it because you changed jobs, you can put it into a rollover IRA and not pay taxes on the withdrawal - there's a time limit though after you receive the withdrawal, so it might be too late to do that.

Answer 5

If you cashed out a 401k, you will receive a 1099R from the trustee. This must go on your return as income. You will then get credit for the withholding amount on page 2 of the return.

Answer 6

If what was contributed towards the 401k was taken out prior to tax, then yes, you must pay taxes on what you receive. Sorry.

Answer 7

Unfortunately yes. I had to close out my pension plan early due to a dental emergency for one of my kids and I had to claim it on my taxes that year.