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Taxes on inherited 401K
I inherited a 401K account worth $2500 after my son's death. Federal and state taxes were deducted before payment. I'm not clear whether these are taxes I'm liable for on the amount, although I am 76, retired and living on my Social Security and don't have sufficient income to be paying taxes currently? Or are the taxes based on his income and part of his estate, to be reported on his 2016 tax return?
If the taxes are for my "benefit," should I be filing a return in order to get a refund of the amount withheld? |
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Sorry about the death of your son!
You should get a Form 1099-R for the IRA distribution. If the Form 1099-R has YOUR SSN on it, then the distribution is on YOUR tax return. If it has a "4" code in Box 7 of the Form 1099-R, you are liable only for the income taxes and NOT a 10% Early Withdrawal Penalty. As to whether you need to file a return, I would think YES unless the withholding exactly matches the tax liability, which is unlikely. |
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