Ask Experts Questions for FREE Help !
Ask
    apendrag0n's Avatar
    apendrag0n Posts: 1, Reputation: 1
    New Member
    		  
    #1

    Jan 24, 2006, 10:19 AM
    401K Question
    I left the employ of a company that I had a 401K through and cashed it out. They withheld 25% for taxes... How/where do I claim this on my 1040 this year?
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #2

    Jan 24, 2006, 05:34 PM
    Apendrag0n:

    Your former employer will send you (and the IRS) a Form 1099-R to document your early cashout. You will owe normal income taxes (both federal and state) plus a 10% earluy withdrawal penalty which cannot be mitigated.

    You must file Form 1040. You show the distribution amount on Line 16a and 16b and the 10% penalty on Line 60. If you have mitigating circumstances for cashing in the 401K, you may get the 10% penalty waived by filing Form 5329.
Not your question? Ask your question View similar questions
 

Question Tools Search this Question
Search this Question:

Advanced Search

Add your answer here.


Check out some similar questions!

401K roll-over question [ 4 Answers ]

I requested that my 401k from my former employer be sent to my 401k at my new employer. The old 401k company mailed the check to me although I had given explicit instructions to send the check to the new 401k company. The check is made payable to "New 401k company FBO 'my name'. Can this...

401K Penalty and Tax Question [ 11 Answers ]

undefinedLast year when I left my job I took my 401K money in the amount of $9850. I realize I have to pay taxes on this in the amount of $1174 (from tax table) and a penalty (I am unsure of the amount). (Is this penalty after tax?) I have listed this on my 1040A line 11a as an "IRA Distribution"...

401K Non-Resident question [ 1 Answers ]

Suppose I will leave US for good this year i.e. Sep 2006. Would it help if I wait a bit and request the entire 401k distribution on Jan 1 2007 instead of i.e. Sep 2006? I am 30 years old, H1B, and earn about 100K/Yr. My 401K balance is about 40K. I am thinking that I will not have W-2 or other...

401K Question [ 3 Answers ]

These questions deal with a 48 year old man, married to a 40 year old lady. I understand that cashing out 401K attracts a penalty of 10% and income tax of 20% if cashed before one is 59.5 yrs. Is this correct? Secondly, if one is short of cash and decides to cash out before they are 59.5 yrs, can...

401K Penalty and Tax Question [ 4 Answers ]

Last year when I left my job I took my 401K money in the amount of $9850. I realize I have to pay taxes on this in the amount of $1174 (from tax table) and a penalty (I am unsure of the amount). (Is this penalty after tax?) I have listed this on my 1040A line 11a as an "IRA Distribution" (this was...

View more questions Search