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    cflath's Avatar
    cflath Posts: 3, Reputation: 1
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    #1

    Feb 13, 2006, 08:12 AM
    401k penalty payment
    Hello,
    This past year I liquidated my 401k and am not eligible for a waiver for the 10% penalty. I used turbo tax to file my taxes and while turbo tax did put me through a questionnaire that resulted in it saying I owed a penalty, it never subtracted the penalty or told me how to go about paying it, and I received the full refund without the penalty taken out. How do I go about paying this penalty? Did I file incorrectly?
    Thanks in advance!
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #2

    Feb 13, 2006, 10:34 AM
    Cflath:

    Based on your input, you may have reported incorrectly.

    However, let me ask one question: What is your date of birth?
    cflath's Avatar
    cflath Posts: 3, Reputation: 1
    New Member
    		  
    #3

    Feb 13, 2006, 10:50 AM
    10/06/1975
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #4

    Feb 13, 2006, 10:50 PM
    Well, your DOB means you should have paid the penalty. There must be a glitch in TurboTax, or you inadvertently answered a question incorrectly.
    cflath's Avatar
    cflath Posts: 3, Reputation: 1
    New Member
    		  
    #5

    Feb 14, 2006, 05:25 AM
    Thank you for your answer, it must be a glitch in TT, it recognized that I had a penalty but never took it out or sent me to an area where I could have it taken out.
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #6

    Feb 14, 2006, 09:29 AM
    You can contact TT and report the glitch. Who knows, they may send you some type of prize.

    As for the penalty, how much do you calculate it to be? If it's a small amount (less than $500), it's possible the IRS will miss it and never try to collect. It has happened with one of my clients who withdrew money from her 401K, reported the distribution as wages, and never paid the penalty. The IRS never caught it!
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