Do I need to amend my 2006 tax return?
2007-03-09 15:52:45 · 4 answers · asked by Real Estate Woes 2 in Business & Finance ➔ Taxes ➔ United States
It's taxable. But only in the year you received it. Even though you overfunded in 2006, you didn't actually get the payment until 2007 it sounds like. Income is taxable in the year received.
2007-03-09 16:45:58 · answer #1 · answered by Fool in the Rain 6 · 0⤊ 0⤋
You have receive the payment for the 2006 excess contribution before April 17. So you need to add it to your wages (Line 7 of the 1040) on your 2006 tax return.
If you have already filed your 2006 tax return, amend the return and add the excess contribution (it will be reported to you on a 1099R with code 8 in Box 7). Enter the data from the 1099R exactly as given to you in your software, and it should add the excess to your wages.
You do not add the excess contribution to your wages for 2007 unless the distribution is made after the due date for the 2006 return. In that case, the excess contribution is added to both the 2006 and 2007 return, and you are taxed twice on the same distribution.
The distribution of excess contributions is not considered an early distribution and the 10% penalty is not assessed on it.
2007-03-09 16:19:00 · answer #2 · answered by ninasgramma 7 · 0⤊ 1⤋
You won't need to amend your return. The money that came out of the 401(k) will just now become taxable in the year 2007.
2007-03-09 15:58:14 · answer #3 · answered by Valerie L 2 · 1⤊ 0⤋
Yes, if you didn't already modify your income or include the distribution on your return. you won't get a 1099-R until january of 2008 so include a note on your amended return explaining the situation.
2007-03-09 16:13:53 · answer #4 · answered by digdowndeepnseattle 6 · 0⤊ 1⤋