2007-02-11 10:45:01 · 4 answers · asked by tobyandtoni 2 in Business & Finance ➔ Taxes ➔ United States
You will report the distribution, and show whatever taxes were withheld. If you are under 59-1/2 and did not roll it over to a qualified plan like a rollover IRA, then yes there will be a 10% early withdrawal penalty.
There are some special tax treatments available for lump-sum pension distributions - see page 73 of IRS Publication 17 - download it at irs.gov
It might be worth your while this year to have a CPA (NOT H&R Block) do your taxes, since they will know what can be done to get you the most favorable tax treatment.
2007-02-11 10:56:38 · answer #1 · answered by Judy 7 · 0⤊ 1⤋
When you got the lump sum distribution if it was any sizable amount the firm handling the distribution should have informed you that if you just rolled it over, it would've been without penalty. If you withdraw money from a Retirement Account before the legal age of 59+ you are subject to a an extra 10% penalty. If you used the money to buy yourself your first home, pay medical expenses, or buy a home for your near descendant you could be exempt from the first $10,000.00 penalty. Check with a professional if you fall into any of these categories.
good luck & bless
2007-02-11 11:37:20 · answer #2 · answered by Wood Smoke ~ Free2Bme! 6 · 0⤊ 2⤋
If you are under 59 1/2 you pay a 10% penalty for withdrawing from your retirement account.
2007-02-11 10:49:16 · answer #3 · answered by cinsingl83 3 · 2⤊ 0⤋
If you still have some or all of the distribution, you have until April 17th to roll it over and avoid the 10% penalty on the portion you roll over.
2007-02-11 11:40:09 · answer #4 · answered by Anonymous · 0⤊ 0⤋