About mitsuhide

mitsuhide · ‎February 21, 2020

So I guess you have until October 15th to actually perform the rollover (place funds into an eligible account). So even if I received the 1099-R on time to file my taxes, if I was due a refund this year (ignoring the 401k distribution for a moment), I could file and note down the distribution, note down the rollover, receive my refund, and not actually have to fund the rollover account until the deadline?

mitsuhide · ‎February 21, 2020

Hello, If one had a 401k loan with their previous company and quit that job, the loan becomes due. Per the Tax Cuts and Jobs act of 2017, you have until your taxes are due for that tax year to roll over the loan balance into an eligible account to avoid paying income taxes and early-withdrawal penalty. So this means April 15th by default and October 15th if you file an extension. Given that information, what would happen if you left the company in December, then filed your taxes in February (mentioning nothing about the loan distribution), received a refund, then some time later you got a 1099-R about the offset/distribution? Can you still roll over the loan balance into an eligible retirement account, re-file a correction and still avoid the major taxation on the balance of the loan? If so, how long would you have? April 15th, or longer? Or once you file at all (even incorrectly) your ability to claim the rollover is off the table?

mitsuhide · ‎January 21, 2020

So this 'rollover' that would equal the unpaid loan balance can be paid by simply sending a check (or wire or similar) to someone (Fidelity) and saying this either needs to be a rollover into my new 401k plan here or a brand new IRA? Is that pretty universal? Would you anticipate any problem with this? Is there a risk Fidelity would not accept even an IRA rollover in this fashion? If this seems to be fine to do, then it seems there is no specific loan-related reason to keep existing funds in my old 401k. And rolling over those funds into my new company's 401k should have no bearing on repayment of the loan? Then what are your thoughts on rolling the balance over, then taking out a new loan from the new 401k, and then rolling over that money into an IRA? Doable in theory? I am not aware of any specific reasons this would not work, considering 401k loans can be made for any reason. The only difference would be that I'd have 5 years to repay the loan balance rather than the original 15 years I had before.

mitsuhide · ‎January 20, 2020

I quit my job in November 2019 with an outstanding 401k loan balance. Per plan rules, they say I have 90 days to pay it back or they mark it as a distribution and send that info to the IRS. When I asked about the new law about having more time to repay it, they had no idea and just referred back to the 90 days plan rules. I have a new job with a new 401k plan under a new fund management company. My old 401k funds are still with the old company's plan for now. What are my options for paying back that loan before my taxes are due this year? Can I roll over my 401k money from my old company into my new company's 401k and then take out a loan from that new 401k to pay back my original loan? If I don't take out a new loan, can I just write a check to someone for the outstanding loan balance? Can I write that check out to my new company's 401k plan? Should they know how to handle that payment? Seems everyone I speak to about this has no idea how the new law about this works. I get conflicting answers everywhere. Some people say I have to pay back the loan to my original place or origin (Vanguard) yet others have said I don't have to do that, as long as I put the money into an eligible retirement account, it doesn't matter who facilitates that account. It would be nice if someone actually knew how it all worked with this new law.

Date Registered	‎January 20, 2020 10:24 PM
Date Last Visited	‎February 21, 2020 1:41 PM
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