Do I have to claim my 401K withdrawal as income on my 1040EZ?

Question

I already paid the 10% penalty as well as the tax percentage based on my income brachet.

Answer 1

You will need to still need to report it and you should have received a 1099R to show the amount of taxes withheld. Between your normal withholding and the withholding on the 401K, you could still could receive a refund if the amount you paid in were too much.

Answer 2

Yes you have to claim it, but not on 1040EZ. Has to be 1040 or 1040A. Also, be careful...most distributions only take the 20% withholding and do not take extra for the 10% penalty. Hardships sometimes take extra but not always. Don't be so sure that yours did.

Grab a copy of the 1040 and look on line 16 a and b...that's where you put the amount that you took (before taxes paid). Then on the back side where you see the section for other taxes...you'll see one for distributions. That's where you put the 10% extra tax. Lastly, just below that you'll see a line for withholding. Combine your w-2 withholding and your 1099-R withholding on this line. After that it's simple match, putting in your exemptions and deductions and voila!!!

Answer 3

You have a couple different issues here. One is the 10% penalty for early withdrawal. If you separated from service after reaching age 55, you may qualify for an exception to the 10% penalty. You would still owe income tax. I'm assuming you're wondering if the 401k distribution would be considered earned income for purposes of the business income limitation for the section 179 deduction. The answer is no. However, keep in mind that any W2 wages you (and/or your wife on a joint return) are considered earned income for purposes of the section 179 business income limitation. Example. You buy eligible 179 property for $10,000. Your business has no profit, but your wages are $20,000. The wages are considered business income for this purpose, so your $10,000 179 deduction would be allowed.

Answer 4

If you had an early withdrawal, you can't file 1040EZ.

You may have had tax withheld from the withdrawal, but it's highly unlikely that enough tax was withheld to pay the total tax due.

You need to file Form 1040 and attach Form 5329 to calculate the penalty.

You'll get a credit for any taxes withheld on the distribution but unless you are a very low wage earner or only cashed out a small amount you probably have additional tax to pay.

Answer 5

Yes, you do. You need to report the 401(k) withdrawal as income on your tax return. I don't recall with the 1040EZ, you might not be able to use this form with a pension distribution.

Also, since you will receive a 1099 showing the distribution and also showing tax withholdings, you will need to attach a copy of this 1099 with your return, just like you would with a W-2.

Answer 6

You will get a 1099 from your 401k administrator for the amount you liquidated.

You do need to account for it on your tax return. The amount withheld for taxes is simply an estimate, you might have paid more or less than the actual amount you should really owe.

If your normal income is being taxed at your normal bracket, and you are getting refunds, your estimated tax could also be higher. Make sense? Either way, it must be accounted for.

Answer 7

Yes, you will need to claim this income. In addition you will need to file a form for the penalty portion. The tax that was withheld is just additional withholding on your 1040.

Answer 8

Yes, report it as income, then take credit for the taxes paid. Then kiss the penalty good bye.

Answer 9

When they sent you the check they should have also sent in the same envelop a tax form.
I don't think you will be able to use the 1040EZ, but probably the 1040A

Answer 10

I would think that you would have to list it.

Also, I am not sure you can use the 1040EZ if you had done this.

This is one of those you should take to a tax professional.