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Can we be charged double taking an early withdrawal from his 401K to buy a vehicle/ Form 1099-R shows a higher amount than he took out, it's double. Why?
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Can we be charged double taking an early withdrawal from his 401K to buy a vehicle/ Form 1099-R shows a higher amount than he took out, it's double. Why?
The amount in Box 1 of the 1099-R is the gross distribution before taxes. By IRS rule, the distribution is subject to mandatory 20% tax withholding. A code 1 in Box 7 indicates that this was an early distribution (before age 59 1/2), which is subject to an additional 10% penalty tax.
Therefore the Box 1 amount will be greater than the amount actually received, but it shouldn't be "double." As @VolvoGirl said, if the figures don't seem right, contact the plan administrator.
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Can we be charged double taking an early withdrawal from his 401K to buy a vehicle/ Form 1099-R shows a higher amount than he took out, it's double. Why?
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Can we be charged double taking an early withdrawal from his 401K to buy a vehicle/ Form 1099-R shows a higher amount than he took out, it's double. Why?
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Can we be charged double taking an early withdrawal from his 401K to buy a vehicle/ Form 1099-R shows a higher amount than he took out, it's double. Why?
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Can we be charged double taking an early withdrawal from his 401K to buy a vehicle/ Form 1099-R shows a higher amount than he took out, it's double. Why?
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Can we be charged double taking an early withdrawal from his 401K to buy a vehicle/ Form 1099-R shows a higher amount than he took out, it's double. Why?
The amount in Box 1 of the 1099-R is the gross distribution before taxes. By IRS rule, the distribution is subject to mandatory 20% tax withholding. A code 1 in Box 7 indicates that this was an early distribution (before age 59 1/2), which is subject to an additional 10% penalty tax.
Therefore the Box 1 amount will be greater than the amount actually received, but it shouldn't be "double." As @VolvoGirl said, if the figures don't seem right, contact the plan administrator.
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