I had them take out taxes for early withdrawal, plus federal taxes plus California taxes ... So when I do my taxes this year, will that mean I get taxed again on the distribution or will my taxes witheld at the time of the distribution cover it?
2007-10-24 12:24:36 · 6 answers · asked by Anonymous in Business & Finance ➔ Personal Finance
You won't be "taxed again". When you do your taxes, it will calculate the amount you owe, and apply the amounts withheld against it. Since you cashed out you 401k, on top of the taxes, you will be assessed a 10% penalty on the total balance cashed out... That will be assessed when you have you 1040 done.
2007-10-24 12:49:51 · answer #1 · answered by Anonymous · 1⤊ 0⤋
You have the terminology all wrong. 1. As soon as they cut the check, you cashed out the IRA. The 1099-R for that year was a given. 2. You had 60 days total to roll the check into the 401K or another IRA. You didn't. the 1099-R *sticks* and that money is now considered AFTER-TAX money. You can't roll it over to another account now at all. (If you do, it's fresh money--still taxable--and subject to the $5K limit on contributions.) 3. You were supposed to report the 1099-R on the 2009 tax return, pay the tax and pay the 10% penalty (unless you are 59.5 years of age or some other exception applies.) 4. I forgot is an expensive lesson. In your case it's $1000 in penalty. If you forgot to include the money on the 2009 return, amend. If you wait much longer, the IRS will send you a CP2000 with the bill, plus interest and penalties. By amending now and paying now, you lesson the addon. Edit: Any new check is simply a replacement for the new check. No matter how this is handled, it does NOT undo the previous check.
2016-05-25 15:24:47 · answer #2 · answered by ? 3 · 0⤊ 0⤋
You haven't been taxed yet. You've simply had money withheld FOR taxes. No different then what happens with your paycheck. In fact, the amount that you took for a distribution is simply added to the money that you made at your job on your federal tax return. You are taxed when you complete your tax return and your tax is calculated based upon your income, your deductions and your exemptions. Very possible that your tax could be 0 and the entire amount that is withheld will be returned to you at the end of the year. OR conversely, you could have made so much that you are in the 38% tax bracket and the 20% that has already been withheld isn't going to cover it and you'll owe more. All depends on your own personal financial numbers.
2007-10-26 02:42:50 · answer #3 · answered by digdowndeepnseattle 6 · 0⤊ 0⤋
When you prepare your tax return, you compute what tax you owe in total and then credit against that whatever has been withheld. The difference is either a refund or additional tax due because of underwithholding. You are not "taxed again."
2007-10-24 12:47:12 · answer #4 · answered by Anonymous · 0⤊ 0⤋
The income must be reported on your 1040 but you also get credit for the taxes withheld.
2007-10-25 01:56:34 · answer #5 · answered by Wayne Z 7 · 0⤊ 0⤋
In what year is it taxed?
2015-01-01 08:01:59 · answer #6 · answered by judith 1 · 0⤊ 0⤋