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MagicalT
Jan 19, 2009, 12:11 PM
Hello, I am a 35 year old and I had a problem with a house payment in 2008. I set up a hardship withdrawal for the house payment of $600. I received a notice of eviction and sent that in to my 401k company. I was approved the final amount of $600 and received the check shortly thereafter. I have my W2 forms from work and I am eager to start my tax return.

Because most companies have their tax forms available on January 31st, I wanted to ask if I would be receiving a 1099 R or 1099 DIV form due to the withdrawal? If I will be receiving one, what information would it have on it? I am new to the 1099 scene and do not know what one even looks like. Thank you for any help!

Tony

AtlantaTaxExpert
Jan 20, 2009, 10:32 AM
You will receive a Form 1099-R for the $600 withdrawal, on which you will pay normal state and federal income tax plus a 10% Early Withdrawal Penalty.

Given the relatively small amount, it will NOT be too much of a financial hardship for you, but you DO need to properly report it on your federal and state income tax returns.

MagicalT
Jan 20, 2009, 07:44 PM
You will receive a Form 1099-R for the $600 withdrawal, on which you will pay normal state and federal income tax plus a 10% Early Withdrawal Penalty.

Given the relatively small amount, it will NOT be too much of a financial hardship for you, but you DO need to properly report it on your federal and state income tax returns.

I have the check stub which shows the original amount withdrawn was $674.16. I received a check for $600. Do I still have to pay an additional 10%? The amount of $74.16 was withdrawn from the original amount.

Also, I am using TurboTax, can I just fill in the blanks with the check stub?

AtlantaTaxExpert
Jan 21, 2009, 10:49 AM
Best you wait until you get the Form 1099-R, because there are certain codes on the Form 1099-R that TurboTax will require to properly prepare your tax return.

MagicalT
Jan 21, 2009, 11:38 AM
Thank you for your help! I appreciate it.

AtlantaTaxExpert
Jan 21, 2009, 01:31 PM
Glad to help!