I took a withdrawal this year from my 401K and paid taxes at the time. Will I have to include this as income and be taxed again when I file my tax return?
More correct to say you had taxes withheld at the time of the withdrawal. The amount withheld may be more or less than the actual amount of taxes due on it. You'll include the income on your return but the amount withheld also goes on your return (the same as withholding from a paycheck). You will not be taxed a second time but the difference between amount withheld and actual tax will increase or decrease your refund or amount due.
Look for a Form 1099-R that should be provided to you from your 401k custodian--probably next January. TurboTax should make the entry for the 1099-R fairly straight forward. The 1099-R will provide data for the amount that you withdrew and the amount of taxes that were withheld. Enter all requested values from the 1099-R in accordance with the prompts. TurboTax will complete the required entries on appropriate forms. Your distribution from your 401k will be considered as income. It will be taxable at the federal level, and it is most often taxable by your state also. If you were under age 59-1/2 at the time of distribution, then your 1099-R will likely show a Distribution Code of 1. If that is the case, then a 10% penalty will be added to your taxes. The 401k plans have only a few exceptions to waive the penalty.
Still have questions?Make a post