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Jsfenton · Feb 11, 2008, 06:49 PM

I filled my taxes earlier this year as soon as I got my w-2 forms. We cashed out my 401k to payoff my car and pay other bills. I was under the assumption that they took the penalty out when I received my check.

I got in a hurry filing my taxes and forgot to include my 1099R. What are the chances it will be overlooked. Or how long will it take for them to realize that I did not claim my 401k withdrawl. Thanks for any help you can provide

MukatA · Feb 11, 2008, 08:57 PM

Mostly, your return will be accepted as filed. Then after couple of months or even years, you will get a letter from the IRS. Then you will have to amend your tax return and pay interest and penalty.

So in your best interest, file an amended tax return.

ebaines · Feb 12, 2008, 08:51 AM

The IRS receives the same information as you received on the 1099-R. As Mukata says, they will notice the discrepancy, and you will owe interest on your underpayment of taxes. If you wait this will only raise your tax burden, so you should amend your return prior to April 15. Be sure to include the full amount of the withdrawal on line 16 of your 1040 ("Pensions and Annuities"), the amount of taxes already withheld as shown on your 1099-R, and the 10% penalty (which is NOT included on the 1099-R) on line 60 - "Additional Tax on IRA, other qualified retirement plans, etc."

ScottGem · Feb 12, 2008, 09:03 AM

Originally Posted by Jsfenton

What are the chances it will be overlooked.

None. As pointed out the IRS gets a copy of the information you got. Only they get it in the form of electronic data. So, they will convert your return to an electronic file and then compare what you reported to what they received about you. And they WILL catch the discrepancy.

Originally Posted by Jsfenton

Or how long will it take for them to realize that I did not claim my 401k withdrawl.

That varies. If you filed electronically, chances are they will catch in sooner. If you filed a paper return it might take longer. But, as ebaines said, you don't want THEM to catch it. The IRS understands that people can goof. But if they catch their goofs themselves it will look much better.

As an aside, I suppose you know how foolish it was to withdraw 401K money to pay off bills. The cost of that money will be much higher then the interest on those bills.

Jsfenton · Feb 12, 2008, 06:04 PM

Thanks everyone for you answers. I will definitely be amending my taxes soon.