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I received a highly taxed refund from Arizona Retirement for my employment in a school district. Is this refund taxable and can i get the 20% tax refunded?
June 5, 2019
11:37 PM
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Retirement tax questions
It is not clear why you received this money. Did you cash out a retirement fund early? Was the money in the fund pre-tax money that was withheld from your pay? And tax was withheld when you cashed it in? You should receive a 1099R in late January that you will enter on your tax return.
**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**
June 5, 2019
11:37 PM
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Retirement tax questions
Yes. I moved from the state and cashed out the retirement that had been withheld from my weekly paychecks for a period of five years. They "penalized" me at move than 20% of the total. My question is, is that money now in the hands of IRS forever, or is there a way to get it or any portion of it back. I've never filed a 1099 before
June 5, 2019
11:37 PM
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Retirement tax questions
You did not answer whether that money was pre-tax or not. Most likely, it was money that was not taxed. So it seems you took an early distribution of a retirement account. Yes, that can be taxable. Again, in January you will get a 1099R which will show how much tax was withheld and the codes in the boxes on that 1099R will determine how much, if any, of the tax withheld will be refunded to you. If you need help with entering the 1099R post back for help later in the tax season. 1099R's are not issued until late January/early February.
**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**
June 5, 2019
11:37 PM
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Retirement tax questions
SO i'D GUESS IT'S PRETTY MUCH GONE............................
June 5, 2019
11:37 PM
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Retirement tax questions
Maybe--but we cannot tell from the information you have provided. If that money was not taxed previously, then when you took it out, it became taxable income to you. It will combine with your other income, and then the software will calculate just what your total tax liability is for your 2018 return. The retirement fund you cashed in is subject to federal and state tax. When you cash out a retirement plan, it is normal for the administrator of the plan to withhold 20% for taxes--just like your employer withholds money from your paycheck for taxes.
**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**
June 5, 2019
11:37 PM
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Retirement tax questions
OK, Thanks. I'll wait until I get all the stuff from Arizona.
June 5, 2019
11:37 PM
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Retirement tax questions
You are welcome. We can help you if you need help with the 1099R.
**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**
June 5, 2019
11:37 PM
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Retirement tax questions
What did you do with the withdrawal? Did you keep the cash or roll it over to a IRA? And how old were you when you stopped working there?
June 5, 2019
11:37 PM
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Retirement tax questions
"Withholding" from a retirement account is just like withholding on a W-2 - it is an estimated pre-payment on your tax. Only when you enter the 1099-R, that you will receive in January, for the retirement distribution and all your other income can the actual tax be known. If the mandatory 20% withholding (and all other withholding) is not enough to cover the years total tax, then you will owe more. If too much then the excess will be refunded to you.
The answer is in your final tax return for the year that includes all of your income, all of your deductions and credits, all of your withholding that calculates the final tax or refund. That is what a tax return does.
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
June 5, 2019
11:37 PM