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A 10% additional tax will apply if you withdraw money from your qualified retirement plan or IRA before you reach age 59-1/2 (and don't roll it over).
To avoid the additional tax, you will have to roll over the entire amount ($20,000) from your 401k into an IRA.
In the future you can avoid having taxes withheld by having a direct rollover where the old institution sends the funds directly to the new institution.
A 10% additional tax will apply if you withdraw money from your qualified retirement plan or IRA before you reach age 59-1/2 (and don't roll it over).
To avoid the additional tax, you will have to roll over the entire amount ($20,000) from your 401k into an IRA.
In the future you can avoid having taxes withheld by having a direct rollover where the old institution sends the funds directly to the new institution.
If the 401k was totally rolled over into an IRA (over 72 years old, and I received a 1099-R, how do I declare this in Turbotax?
Enter your Form 1099-R and be sure to answer all of the follow-up questions. If the distribution code on the Form 1099-R did not indicate a direct rollover, then you should be asked what you did with the money from the distribution. The questions will ask specifically about putting it into a Roth account and if you indicate 'no' to the Roth questions then it is assumed that it went to a Traditional IRA instead.
Use the following steps to get started:
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