401k in a previous job? how do i file taxes?

Question

i had a 401k in a previous job that i left 2 years ago. i did not take the money out, do i have to do anything with it regarding filing taxes?

Answer 1

No, if you did not take the money out your employment status is irrelevant. 401k is tax free until the point of withdrawal, subject to higher penalty upon early withdrawal.

Answer 2

No, not until you take the money out. If you take it out and roll it over into some other pre-tax account like a 401K at a new employer or a rollover IRA, you'd have to show that on your tax return but wouldn't have to pay taxes on it until you took it out of the new account. If you took it out and DIDN't roll it over, then you'd have to pay taxes immediately, plus a 10% penalty if you are under age 59-1/2.

Answer 3

My compliments to you for not cashing it out as most people do which sometimes creates huge tax problems. You don't have to do anything tax wise as it is growing in value with the taxes deferred until you cash it in. If your current company also has a 401(k), you can have it's administrator "roll it over" into their plan, but don't touch the money yourself as you can incur a 10% penalty for early withdrawal, plus have it all dumped on top of your other income in the year you cash it out causing big tax problems and the Government winds up getting most of it. If your present employer doesn't have a 401(k) plan, a reliable Financial Advisor can help you move it to another venue without touching the money yourself. Think of it this way....it may be the only thing in your whole life that is gaining in value instead of depreciating it's butt off, with the possible exception of a house. You buy a car for $30K, and 3 years later it's worth $15K so it's lost half it's value. You buy a new sofa for $1500 and when you take it out the door, it's worth $500 max should you need to sell it. Hang on to the 401(k) and when you reach my age (65) you won't have to work as a Tax Preparer as I do to supplement my Social Security .