I was recently terminated from my job of 11 years. While I never had a 401k with the company I worked for that I made contributions to, the company made contributions on their own for the employee for many years, even though I never started or made payments into a 401k. I cashed out the 401k last week and had the federal tax of 20% withheld. Was told no 10% penalty cause this was done in the year I turned 55. Now, come tax time in 2007, how will I handle this on my taxes? Remember, this is money that I NEVER contributed to.
It was only $4933.00 minus the 20% tax but what do I do come taxtime?

The redemption is similar to a distribution from a pension plan; it is taxable income. You will get a Form 1099-R to show that distribution and the withheld taxes. It is posted on Line 16a and 16b on Form 1040 or Line 12a and 12b of Form 1040A.