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401k rolling into an IRA - WASHINGTON

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issha

Junior Member
Hello! I'm from Seattle, Washington.

I lost my job in October last year and I had a 401k plan there. Right after I lost my job, I went on a family vacation for 3 weeks and I've been looking for a job since I got back. In any case, I received a letter from the company stating that my 401k had been rolled over into an IRA. I'm assuming that was done because I have yet to find another job to transfer the 401k.

I have no problem with that except how do I file this on my taxes? I have my W-2 from my former employer and it shows "Less 401(k) (D-Box 12)" and gives an amount under "Wages, Tips, other Compensation Box 1 of W-2". Do I use this amount in the Adjusted Gross calculator when it asks me to enter the IRA amount? Or do I not do anything with the IRA?

Can anybody give me some advice? If my question is too confusing, I am more than happy to provide any more information on my issue.

Thanks in advance!

~issha
 


abezon

Senior Member
For a custodial-to-custodian direct rollover, the company generally doesn't even send out a 1099-R. Nothing is taxable.

The 401k contributions will not affect your return, unless you are getting a saver's credit. That should happen automatically if you enter the W-2 correctly.
 

issha

Junior Member
abezon said:
For a custodial-to-custodian direct rollover, the company generally doesn't even send out a 1099-R. Nothing is taxable.

The 401k contributions will not affect your return, unless you are getting a saver's credit. That should happen automatically if you enter the W-2 correctly.
I don't understand much about taxes. :confused: Sorry, I don't know what a saver's credit is. My 401k is very small because even though I was with the company for 6 years, I just recently enrolled in it. I think it was for only a year or so. How do I qualify for a saver's credit? Or is it something I even have to worry about?

Also, it's not a 401k anymore - at least I don't think it is. I don't have the letter and I'm still waiting to hear back from them, but they said it is now an IRA. I think you can use IRA's as tax deductible?

I apologize for sounding ignorant. It's my first time doing taxes that are a little more complicated than just the usual "Wages & Tips". It was so much easier when I was able to do Telefile... I know, they've discontinued that. :rolleyes:
 

Snipes5

Senior Member
Gosh I am argumentive today...

If it was rolled into an IRA, they should send you a form 1099R, listing the Rollover, since changing the 401K to the IRA actually somewhat changes the character of the money, in that the distribution rules are not identical.

You need to contact the company and probably wait for the form to come in early February.

The Savers Credit is a credit against your tax for contributions to most types of retirement plans, including both 401K Plans and IRAs.

If this stuff is worrisome and confusing to you, take it to a tax professional who can do it for you. Watch what they do, and if it looks easy enough, you can do it yourself the following year.

You can also get assistance directly from the IRS at one of their local offices.

Snipes
 

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