I have always prepared mine and wifees taxes as a joint return and it was always easy cause we took standard deduction and did not itemize.....But last year I changed jobs and emptied out my 401k that I had with that employer. Now I know I have to report this somehow...just seems very confusing and I don't want the IRS breathing down my neck if I screw it up. Any thoughts???
2007-01-16 08:15:59 · 7 answers · asked by Mr. Knowitall 2 in Business & Finance ➔ Taxes ➔ United States
I would use turbo tax...but if all you have is the emptied 401k then let me tell you exactly how to handle it. Print this out and grab your 1040, w-2's and 1099-R and go to it.
If nothing else changed (ie no itemizations and standard deductions) then you'll use the 1040 form.
You will shortly receive a 1099-R for that distribution. It's much like a w-2. Box 1 is your gross distribution. This goes on line 16a on your 1040 form. Box 2a of the 1099-R is your net distribution. If you have no after-tax money and you didn't roll any of the balance over it's likely the same as Box 1. This goes in line 16b of the 1040.
Add the withholding on box 4 of the 1099-R to the total withholdings from all of your w-2's and put that total on line 64 of the 1040 (it's on back of page).
Then you have to determine if you owe the additional 10% tax. Obviously you didn't die or become disabled, nor did you likely take installment payments or others...the only savings grace you may have left is the over age 55 when you separateed from service. If you were over age 55 when you left your old job then you don't owe this tax. If weren't you owe the tax. Take 10% of the amount in box 2 and put that on line 60.
Your exemptions go on line 42 and your standard deductions go on line 40...Your tax from the tables goes on line 44. Other than that just make sure everything adds up and every time it says subtotal or total you put the appropriate subtotal or total on that line. Lastly, make sure you attach the 1099-R with the w-2's.
All you have to know is that you declare the income...you get the withholding...and you owe the 10% extra tax. If you took care of all of that then the IRS won't have an issue with you.
2007-01-16 09:21:50 · answer #1 · answered by digdowndeepnseattle 6 · 0⤊ 0⤋
If your income for the year is less than around $30,000, a better option is to look for a VITA or TCE site near you - see irs.gov for more information on those programs. Trained preparers will do your taxes at no charge. Most sites do federal and state, and will efile them for you for free.
2007-01-16 16:43:41 · answer #2 · answered by Judy 7 · 0⤊ 0⤋
They can be a nightmare! I know from personal experience! Can't even begin to explain everything they did! I will never do mine, I have a personal accountant though instead of HR, I think they are more personal.
2007-01-16 08:26:58 · answer #3 · answered by Shari 5 · 1⤊ 0⤋
Honestly, with the quality of do-it-yourself tax software like Turbo Tax nowadays, it is pretty easy for anyone to do their own taxes.
2007-01-16 08:21:20 · answer #4 · answered by jseah114 6 · 1⤊ 0⤋
I think they are way to expensive. You can have an accountant do it for cheaper. I do mine on Turbo Tax.
2007-01-16 08:55:06 · answer #5 · answered by Stace 2 · 1⤊ 0⤋
it never hurts but I use their software that way in case of audit you are protected (unless you did something stupid like claim hoh with 8k of earnings) all of the 401 stuff is on your w-2 just fill it when when it says to.
2007-01-16 08:23:28 · answer #6 · answered by Anonymous · 0⤊ 0⤋
i would go to hr block i was audited last year cause i had my mom do my taxes with my husbands child support and it is still in review so i wouldn't take any chances
2007-01-16 08:24:34 · answer #7 · answered by jazper1028 1 · 0⤊ 1⤋