Gharib <Noemail[at]Nospam.On.net> wrote:

- quote -

Any amount, up to the gross 401k distribution, that you roll
over to an IRA within 60 days will not be taxable income so
not subject to a penalty either.

If you roll the full distribution including the 20% tax that
had been withheld, into an IRA, none of the disribution will
be taxable.

__
Art Kamlet ArtKamlet [at] AOL.com Columbus OH K2PZH

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"Gharib" <Noemail[at]Nospam.On.net> wrote:

- quote -

Roll it if you wish, and also find a way to replace the
withholdings. You should have been notified in advance of
the plan being closed and what your options were.

--
David M. Woods, EA, ChFC, CLU
Woods Financial Services
Norwood, MA 02062
www.woods-financial.com

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Gharib wrote:

- quote -

It means you have to take the distribution, since total was
under 5000$.

- quote -

Then do so within the sixty days. Be sure of course to roll
over the entire (gross) amount, meaning you'll have to
scrounge up the taxes withheld.

ChEAr$,
Harlan Lunsford, EA n LA
24 Mar 2005

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Gharib <Noemail[at]Nospam.On.net> writes:

- quote -

No. If you deposit it into a traditional IRA account
within 60 *calendar* days of the date the check was
drawn, then it'll be considered a rollover and not
be taxable.

*However*, if you want to avoid all tax and penalty, you
need to deposit the *gross* amount into the IRA, not
the net amount.

In other words, if the gross balance was $50,000 and
you got a $40,000 check with $10,000 withheld for taxes,
you need to deposit *$50,000*. If you only deposit
the $40,000, then the remaining $10,000 will be consider
a distribution and you'll owe income tax and penalty
on that $10,000.

In either event, you'll claim the $10,000 as a tax payment
when you file next April (just like you do with the
income taxe withheld from your paychecks).

--
Rich Carreiro rlcarr[at]animato.arlington.ma.us

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"Gharib" <Noemail[at]Nospam.On.net> wrote:

- quote -

DON'T CASH THE CHECK!

Something is very wrong. A 2005 distribution shouldn't come
with a 2004 1099-R.

When a plan terminates you have the right to roll your
account into an IRA without tax withholding or tax
liability. Call Schwab, get up the food chain to someone
with some authority, and find out how to proceed.

--
Phil Marti
Clarksburg, MD

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Rollover the 401k money before 60 days have passed. If they
deducted taxes from this money, you will have to report that
tax money as income in 2005 and pay any taxes and penalties
on that amount.

Missy Doyle

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Gharib wrote:

- quote -

You don't have any say in the matter. It appears as though
the plan has been discontinued and the balance sent to you.
You can avoid taxation by rolling it over to an IRA or
another employer plan within 60 days from distribution.
Please note, that to avoid all taxation you would have to
rollover the gross amount, not the net amount after
withholding. In other words, you would have to come up with
the amount withheld for the rollover. If you don't make up
for the withholding on a rollover, then the amount withheld
becomes a taxable distribution. When you file your tax
return, you could ask for a refund of any excess
withholding. If you don't roll it over, and you are under
age 59 1/2 and can not meet any of the normal qualified
retirement plan exceptions to the penalty, you would also be
subject to the 10% additional tax.

--
Alan
http://taxtopics.net

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Please, help with below problem:

The company I used to work for closed down. Their 401K was
being administered by Charles Schwab. The other day (March
2005) I received a check for 401K amount minus the Tax from
Charles Schawab. I also received 1099-R where they show in
box #4 'Federal Tax witheld' amount that was deducted.

Questions:
1. Is this mean I don't have any say and I must take the
payout (consequetnly, pay the taxes + Panelties)?
2. I really wanted to rollover to my IRA account so, I don't
have to pay tax + panelties, can this be done at all?

Thanks in advance,
-MSD

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