I filed my taxes and am set to receive a return. Problem is I just received a 1099 for around $40,000 from a 401-K that I cashed out last year. Will the IRS they just send me a bill or do a HAVE to amend? Thanks.
2007-02-05 06:21:22 · 6 answers · asked by Tom T 1 in Business & Finance ➔ Taxes ➔ United States
You need to file an amended return, in addition to the tax owed you also have the 10% penalty for early withdrawl from the account. unless you meet the exceptions to the penalty.
Publication 575
http://www.irs.gov/publications/p575/index.html
2007-02-05 06:29:57 · answer #1 · answered by Anonymous · 1⤊ 0⤋
You MUST file an amended return on Form 1040X by April 17, 2007 and pay any additional taxes and penalties (if any) due. If sufficient tax was withheld from the distribution you'll get any additional refund due.
If you wait for the IRS to catch it and send you a bill, there will be additional late penalties and interest assessed if they don't catch it before April 17, 2007 if there is any tax due and it's unpaid by April 17, 2007. They generally don't start reviewing tax returns closely until after the filing deadline as the staff are too busy processing returns for refunds and looking for basic math errors.
2007-02-05 06:33:49 · answer #2 · answered by Bostonian In MO 7 · 2⤊ 1⤋
You CAN wait until they bill you...but as the IRS moves at a snail's pace, they most likely will not bill you until months after the tax deadline. In which case, the amount you owe will start leaping upwards at a sickening rate.
If that was an early withdrawal, you'll owe $4000 early withdrawal penalty (unless you rolled it over or there was an exception to the early distribution rules in your case), plus income tax on top of that. If it's taxed at 28% (depends on the rest of your tax situation), that's $11,200, for a total of $15,200 due on that withdrawal.
Painful. Hope you had some tax withheld for the purpose. Otherwise, start saving so you can send in the money - the longer ou wait, the more interest you'll have.
2007-02-05 06:31:14 · answer #3 · answered by Anonymous · 0⤊ 1⤋
If you did not report the 1099, you have to amend.
2007-02-05 06:24:50 · answer #4 · answered by wizjp 7 · 0⤊ 1⤋
If you don't amend it by April 15th, you might be penalized if you owe taxes on that $40K. Hopefully, they withheld enough when you liquidated it, but if I were you, I'd just get that amendment done.
2007-02-05 06:24:37 · answer #5 · answered by Anonymous · 0⤊ 1⤋
You need to file an ammendment ASAP to avoid penalties.
2007-02-05 06:24:45 · answer #6 · answered by Wijssegger 3 · 0⤊ 1⤋