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Tax Information With A Mother's Touch
Published by Eva Rosenberg, MBA, EA
Volume 3 Issue 120 July 6, 2001
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Tax Information With A Mother's Touch Published by Eva Rosenberg, MBA, EA Volume 3 Issue 120 July 6, 2001 |
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» From: San Jose, CA Dear Wonderful TaxMama! When I was recently laid off from my job, I didn't have enough in my 401K to keep it with the company's plan. It was cashed out to me, with Federal and State taxes removed. OK, my question, please. With the drop in the stock market, the value of my 401K had also dropped. Can I take the difference between what I put into it and what I was cashed out as a capital gains loss? Thanks! Brenda  What a shame... No, you can't write off the loss. After all you never paid tax on the money you deposited. But, with getting cashed out now, you will have penalties to pay along with the taxes. So, please, see about depositing all that money into an IRA. (Open a separate IRA for these funds. That will protect that money from a great many ills that befall other accounts.) And if your company was unkind enough to take withholding on that money .... find a way to deposit the amount they withheld into that rolled over IRA. Why? Because it's a really obnoxious thing .... that money that was withheld to pay IRS and/or FTB will cost you penalties!!! (If there is still time, you might ask your former employer to refund you that money they withheld without your consent.) Best wishes Eva Rosenberg Your TaxMama Click Here for TaxMama's Honor System |
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| Library of Congress - ISSN 1532-0790 Copyright © 2000-2009 - Eva Rosenberg |
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