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Rjbmr
Level 2
October 22, 2025
Question

Inheritance tax

  • October 22, 2025
  • 1 reply
  • 0 views

If money is left in my 401K after I pass, and the money is inherited by my children, what will their tax burden be?

 

1 reply

A
Employee Tax & Finance Expert
AmitaREmployee Tax & Finance Expert
Employee Tax & Finance Expert
October 22, 2025

The money you leave in your 401K that is untaxed in your lifetime, will be taxed as ordinary income when your beneficiaries take the distributions.  How much tax they pay on it will be dependent on their tax situation, income level, filing status, age, tax bracket etc. etc.

The rules are different if you're a spouse beneficiary or a non-spouse beneficiary.

Thanks @Rjbmr for participating in this event.

 

Retirement topics - Beneficiary

 

 

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