topic State filing requirements may be different. in Retirement tax questions

Inheriting a 401k

roberttmillwood — Sat, 01 Jun 2019 01:08:01 GMT

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?

You don't even have income unless you actually take the w...

Opus 17 — Sat, 01 Jun 2019 01:08:03 GMT

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/

State filing requirements may be different.

SweetieJean — Sat, 01 Jun 2019 01:08:06 GMT

State filing requirements may be different.

If a distribution of this amount would not result in any...

dmertz — Sat, 01 Jun 2019 01:08:08 GMT

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.)

True, if you don't need to spend the money now, rolling i...

Opus 17 — Sat, 01 Jun 2019 01:08:10 GMT

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.