happyscooter
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Post by happyscooter on Jan 22, 2011 14:46:56 GMT -5
DH retired last year, does not qualify for a pension. Administrators sent him a check for $320k. He immediately signed it and gave it back to them less than a week after receiving it. (He took it to them so it wasn't lost in the mail). Got the info for taxes today and yep, it says '$320k disbursed.' How much trouble is it going to be to have them send out a new form? It does not show taxes or penalty taken out. Thank you.
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Deleted
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Post by Deleted on Jan 22, 2011 14:59:06 GMT -5
Did he get any paperwork when he turned it back in?
And do you mean he endorsed it?
And what kind of form did you get? 1099-R? If so, how was it coded?
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happyscooter
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Post by happyscooter on Jan 22, 2011 15:12:57 GMT -5
yes, he endorsed it. The administrator told him to so it could be deposited back into his account. The paper actually looks like a W-2.
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happyscooter
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Post by happyscooter on Jan 22, 2011 15:14:57 GMT -5
Coded -Gross distribution. But no taxable amount. No taxes withheld. It says -distribution code is G. Definition of G-Direct rollover.
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happyscooter
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Post by happyscooter on Jan 22, 2011 15:16:57 GMT -5
Yes it is a 1099-R. It has the box 'total distribution' marked with a big X.
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happyscooter
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Post by happyscooter on Jan 22, 2011 15:22:06 GMT -5
Of course, we always get these things on a Saturday when no one is open.  |
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Deleted
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Post by Deleted on Jan 22, 2011 16:07:17 GMT -5
Yes, you need to get a corrected 1099. But at least the wrong one you got would not affect your taxes this year.
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happyscooter
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Post by happyscooter on Jan 22, 2011 20:47:42 GMT -5
I read the part about 'this information is being furnished to the IRS.' I just hope the IRS doesn't say 'well, hello happyscooter and retired happyscooters husband.'  |
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Post by ilea on Jan 22, 2011 22:16:36 GMT -5
If it happened in 2010, it does affect the tax return you will complete this year. Since the disbursement was made, the plan administrator probably cannot change the 1099R. Just report it on your tax return as an indirect roll-over. No harm, no foul.
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happyscooter
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Post by happyscooter on Jan 25, 2011 8:36:36 GMT -5
I spoke with the investment firm yesterday. That is the correct form and will have to be filed with our taxes. They will be sending out a 5498 form to attach with it saying it was rolled over. The only bad thing from speaking with them is DH learned that we could get the money for 60 days and then pay it back. When I explained that if it wasn't paid back and we kept it for 61 days, then we would owe taxes on it. Plus penalty. So if we took out $20.00 to go out to eat (I had to keep it simple) and it wasn't paid back in 60 days we would owe. He said "but just on the $20, right?' |
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Deleted
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Post by Deleted on Jan 25, 2011 9:04:35 GMT -5
But i thought it wasn't his money to begin with?
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Taxman10
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Post by Taxman10 on Jan 25, 2011 9:36:45 GMT -5
But i thought it wasn't his money to begin with? Let me see if i can interpret this Arch.... Her husband could have taken a monthly pension or a lump sum distribution. He was supposed to get the lump sum and roll it all over into an IRA at the same brokerage that held the pension investment. For some reason, the brokerage sent him a check instead. He endorsed the check and took it back to the broker who deposited it in an IRA. When the 1099 came, it was confusing b/c he doesn't have $320k sitting in his checking account and she doesn't want the IRS to think she does. Am I right? :-) ETA: re-read OP - he probably didn't qualify for the monthly pension, that's why he automatically got the lump-sum |
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Deleted
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Post by Deleted on Jan 25, 2011 9:39:05 GMT -5
But i thought it wasn't his money to begin with? Let me see if i can interpret this Arch.... Her husband could have taken a monthly pension or a lump sum distribution. He was supposed to get the lump sum and roll it all over into an IRA at the same brokerage that held the pension investment. For some reason, the brokerage sent him a check instead. He endorsed the check and took it back to the broker who deposited it in an IRA. When the 1099 came, it was confusing b/c he doesn't have $320k sitting in his checking account and she doesn't want the IRS to think she does. Am I right? :-) ETA: re-read OP - he probably didn't qualify for the monthly pension, that's why he automatically got the lump-sum Wow.. if you are right, you are good.. Must come from reading between the lines of what your clients are telling you. I am impressed! |
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happyscooter
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Post by happyscooter on Jan 25, 2011 18:39:56 GMT -5
Sorry Archie. Taxman is correct. It is DH's money however he is not old enough to qualify for it YET.
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Deleted
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Post by Deleted on Jan 25, 2011 21:46:47 GMT -5
No need to apologize. I am just impressed with taxman's skillz.
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