Basic Tax Question?

Question

Most of my tax info is simple, but this year there is something different. When I quit a job this year I withdrew my employer setup retirement, which had taken 12% of my pay check out prior to taxes and put it into their retirement system (they would match the contribution). The total amount was around 2600 dollars.

I reinvested 100% of the funds into an IRA with AG Edwards.

My question is what tax software should i use, or should I go ahead and see one of the people at HR Block or Jackson Hewitt?

I am concerned because the money I withdrew had not been taxed at all and there are alot of fees associated with withdrawing the money before a set time. I am worried Uncle Sam may think I am trying to dodge some taxes and try to Audit me later.

when i ask what software i should use i mean, which...level i guess, like turbo tax has regular, deluxe, and premium

Answer 1

you can file with any tax software like turbotax. you can purchase the most basic edition. it will ask you about IRA distributions.

you probably received a 1099-R reporting this distribution. however if you rolled it over into an IRA within 60 days you will not be taxed on this money, nor will you be subject to the 10% early distribution penalty.

dont worry about it. people do it all the time when leaving jobs and starting new ones.

Answer 2

I don't have any recommendations on software or preparers, but you can rest easy that the retirement money won't be taxed since you rolled it all over into an IRA. Nobody will think you're trying to dodge anything - people do that all the time, and it's legally allowed, and is encouraged.