Inheriting a 401k

[roberttmillwood]

I am inheriting a 401k and it's less than 10k. I made no other income this year. Since it's less than the amount required to file.Do I still need to report it?

[Opus 17]

You don't even have income unless you actually take the withdrawal from the 401k. If you just let it sit to grow earnings, you won't have any income to report.

If you do take the distribution, and this is your only income, you won't owe income tax and aren't required to file.  But since the trustee will issue a 1099-R form, the IRS may send you an automated letter if they can't match the 1099-R to a tax return. You will probably save yourself some hassle if you file a return.

If your income is less than $31,000, you can file using the Tax Freedom edition, which includes complicated forms not normally included in the free version. It's a different web site for contractual reasons. https://turbotax.intuit.com/taxfreedom/

[SweetieJean]

State filing requirements may be different.

[dmertz]

If a distribution of this amount would not result in any tax liability, it may be beneficial to roll it over to a Roth IRA.  (If you are a non-spouse beneficiary, the rollover must be to an Inherited Roth IRA and must be a direct rollover, not paid to you which you subsequently roll over within 60 days.)

[Opus 17]

True, if you don't need to spend the money now, rolling it over to a Roth will reduce or totally eliminate your taxes in the future when you do need to spend it.