Category Archives: 401K

Extra IRS Taxes Plus

Today TaxMama® hears from Wayne  in the TaxQuips Forum, with this question.  “I received a notice from the IRS that my 2011 tax return did not include a withdrawal from my 401k. So I had to pay roughly $3,500 in taxes and penalties for this omission by my tax preparer. Is this $3,500 payment deductible […]

Mandatory Distribution

Today TaxMama® hears from Patricia in the TaxQuips Forum, with this question.  “I have a client who is 70.5 and working for his own company. He has a 401k plan. Does he have to start taking distributions from his 401k because he is 70.5, even though he is still working? Can he still contribute to […]

Contributed and Quit

Today TaxMama® hears from Sergey in the TaxQuips Forum, with this problem. “I started a new job with a 401k plan this year; but I had to quit after a few months. I accumulated some money in my 401k with this organization; and I want to take that money out now. Am I subject to […]

2010 401k Rollover

Today TaxMama® hears from Tom in the TaxQuips Forum with this issue.  “I rolled over a 401k directly to a Roth IRA in 2010.  I received a 1099 for this, but did not fill out an 8606 when I submitted my 2010 return. The plan was to report half of the taxable amount in 2011 and […]

IRS Announces Pension Plan Limitations for 2011

WASHINGTON — The Internal Revenue Service today announced cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2011. In general, these limits will either remain unchanged, or the inflation adjustments for 2011 will be small. Highlights include:

Top Ten Facts about Taking Early Distributions from Retirement Plans

Courtesy of IRS Some taxpayers may have needed to take an early distribution from their retirement plan last year. The IRS wants individuals who took an early distribution to know that there can be a tax impact to tapping your retirement fund.  Here are ten facts about early distributions.

Solo 401k Contribution

Today TaxMama hears from Dabeler in the TaxQuips Forum, with this question. “2009 is my first year as a sole proprietor.  I set up a solo 401K in Dec 2009.  I made $185,000 on my 1099.  Can I put in the full $54,500 for 2009?  I am over 50.”

Bad Roth IRA Advice

Today TaxMama hears from Carla in Indiana, who is concerned. “I have a client who took $105,000 from his 401(k) and rolled it over into a ROTH IRA because his investment advisor said that you only include the income you made that year. My research says to include the whole $105,000 as income.”

Cashing Out Retirement

Today TaxMama hears from Jessie in California, who’s broke. “ I am 22 years old and unemployed. I recently hit a financial snag and am really considering cashing out my 401(k) plans. In total it would amount to $4,995.85. Because of state and federal taxes as well as the fee for cashing out early, how […]

IRS Issues Guidance on 2009 Required Minimum Distribution Waiver

WASHINGTON ― The Internal Revenue Service today provided guidance for retirement plan administrators, plan participants and retirees regarding recent legislation affecting required minimum distributions. The Worker, Retiree, and Employer Recovery Act of 2008 waives required minimum distributions for 2009 from certain retirement plans. Generally, a required minimum distribution is the smallest annual amount that must […]