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    crysole22's Avatar
    crysole22 Posts: 3, Reputation: 1
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    #1

    Jan 25, 2010, 06:05 AM
    How much are 401ks taxed
    My husband got a new job at the beginning of 2009... when leaving we received the money that was in his 401k (needed it). I know that they taxed it before disbursing the money, but I want to know if we will be penalized when filing our taxes for 2009? We live in the state of GA. Does anyone know if we have to pay taxes on it again? It was only about $1000 as he was not with the company long.

    Thanks
    ScottGem's Avatar
    ScottGem Posts: 64,966, Reputation: 6056
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    #2

    Jan 25, 2010, 06:32 AM

    No they did NOT tax it. What they did was withhold 20% against your tax liabilty. So you will get a 1099 from his old company listing the amount of the distribution and the amounts withheld. You add the total amount of the distribution to your taxable income and the amount withheld to your withheld amount. You then add a 10% penalty for early withdrawal.
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #3

    Jan 26, 2010, 03:20 PM
    The only good thing about this is that the amount ($1,000) is relatively small, so the tax bite will not be too great!
    crysole22's Avatar
    crysole22 Posts: 3, Reputation: 1
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    #4

    Jan 27, 2010, 11:43 AM
    Quote Originally Posted by AtlantaTaxExpert View Post
    The only good thing about this is that the amount ($1,000) is relatively small, so the tax bite will not be too great!
    Thank you... you put my mind at ease
    crysole22's Avatar
    crysole22 Posts: 3, Reputation: 1
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    #5

    Jan 27, 2010, 12:18 PM
    Quote Originally Posted by ScottGem View Post
    No they did NOT tax it. What they did was withhold 20% against your tax liabilty. So you will get a 1099 from his old company listing the amount of the distribution and the amounts withheld. You add the total amount of the distribution to your taxable income and the amount withheld to your withheld amount. You then add a 10% penalty for early withdrawal.
    Thank you very much... we received a w2 from his old company. Is that all that we need to file? We haven't received a 1099.
    ebaines's Avatar
    ebaines Posts: 12,131, Reputation: 1307
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    #6

    Jan 27, 2010, 12:50 PM

    You will receive a 1099-R form from the 401(k) plan administrator - it should arrive in the mail within the next week or so. You report the income shown on the 1099-R on line 16 of Form 1040 ("Pensions and Annuities"), you report the 10% penalty on line 58 ("Additional Tax on IRAs, other qualified retirement plans, etc"), and the amount that was withheld you include in line 61 along with the withholding listed on your W2's or other 1099's.
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