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income averaging

dodsonak — Tue, 01 Feb 2022 18:19:47 GMT

Under the QDRO exception I withdrew $235,000 from the 401K that the QDRO transferred to me. Is there any income averaging I could do?

Re: income averaging

MinhT1 — Tue, 01 Feb 2022 18:49:21 GMT

The 10-year income averaging is no longer allowed after 1986.

You'll have to pay tax on your QDRO withdrawal in the year of withdrawal.

Please read this IRS document for more information.

Re: income averaging

Rocky22 — Mon, 22 Aug 2022 16:12:05 GMT

income averaging eligibility for large 401k withdrawal

Re: income averaging

NCperson — Mon, 22 Aug 2022 16:20:21 GMT

@Rocky22 - are you asking whether you can average your 401(k) withdrawls and report the income over more than 1 year? to my knowledge, there is no such thing. If you receive cash from your 401(k) - a taxable distribution - , the IRS wants its fair share in that same tax year. What I think you are asking is whether you can get the cash in one year but not pay the related tax until future years... Not to my knowledge.

Re: income averaging

VolvoGirl — Mon, 22 Aug 2022 17:06:05 GMT

Due to Covid-19 Back in 2020 you could split the taxes on the withdrawal over3 years and report 1/3 income each year. But any withholding on it was all reported in 2020. That would bump up your income in the next 2 years but without taxes withheld.