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#1
08-23-2005, 11:55 AM
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Got my 401k lump sum with taxes witheldPA. I made a mistake when filling out paperwork from my old employer 401k. I received the lump sum minus 20% for taxes. My new 401k adminstrator told me the only way arond is for me to advance the tax amount and add it to the lump sum, then deposit everything within 60 days. He said I can get the taxes back next year from the IRS. What is I only roll 80% to the new 401k, what are the consequences? Thanks. JC  |
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#2
08-23-2005, 12:26 PM
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| The 20% will be added to your taxable income for 2005 subject to federal and possibly state income tax. Also, unless your employment ended with that company in the year you turned 55 or later, that 20% will be considered an early withdrawal subject to a 10% federal penalty (and possible state penalty). Last edited by ShyCat; 08-23-2005 at 12:28 PM. Reason: fix typo |
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#3
08-23-2005, 02:53 PM
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| Yes. If you don't have the amount of the taxes available, borrow it from someplace, and deposit it, ASAP. If not, they could very well consider the entire amount an early distribution, not just 20% of it. Snipes
__________________ This post does not create an agreement to represent you before the IRS, nor does it invoke confidentiality regulations. Postings are based only on the information provided and you should consult a tax professional in your area before relying on information contained in this post. |
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