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I had to pull out $20,000 from my 401k. But with penalties and taxes $31000 had to be withdrawn. Why is the full amount considered income when $11,000 went to taxes.
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posted
May 31, 2019
9:25 PM
last updated
May 31, 2019
9:25 PM
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I had to pull out $20,000 from my 401k. But with penalties and taxes $31000 had to be withdrawn. Why is the full amount considered income when $11,000 went to taxes.
The taxes that were withheld will show up as payments towards the taxes due on the tax return. Just enter the 1099-R that you received as its shown and the software will do the rest.
♪♫•*¨*•.¸¸♥Lisa♥ ¸¸.•*¨*•♫♪
May 31, 2019
9:25 PM
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I had to pull out $20,000 from my 401k. But with penalties and taxes $31000 had to be withdrawn. Why is the full amount considered income when $11,000 went to taxes.
Yea, but the penalties and taxes that I paid and considered income put me in a higher income bracket.
May 31, 2019
9:25 PM
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I had to pull out $20,000 from my 401k. But with penalties and taxes $31000 had to be withdrawn. Why is the full amount considered income when $11,000 went to taxes.
Yes, that happens. Pulling money from a retirement account is an expensive place to get the cash. If the 401K had been an IRA, you could have avoided the penalty on $10,000 of the withdrawal, but that doesn't work with a 401K. The entire amount is still taxable though.
♪♫•*¨*•.¸¸♥Lisa♥ ¸¸.•*¨*•♫♪
May 31, 2019
9:25 PM
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I had to pull out $20,000 from my 401k. But with penalties and taxes $31000 had to be withdrawn. Why is the full amount considered income when $11,000 went to taxes.
It is a TRA IRA-1
May 31, 2019
9:25 PM
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I had to pull out $20,000 from my 401k. But with penalties and taxes $31000 had to be withdrawn. Why is the full amount considered income when $11,000 went to taxes.
Federal income taxes paid are not tax deductible. This means that the amount withheld for taxes from your TIRA distribution cannot be excluded from income. It's effectively the same as if the entire amount was paid to you and you then used a part of the money to make an estimated tax payment.
May 31, 2019
9:26 PM
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