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April 11, 2025
Question

401k tax reimbursement

  • April 11, 2025
  • 1 reply
  • 0 views

 I invested in a business opportunity using funds withdrawn from my 401K. I was supposed to be able to put the money back into my 401K before 60 days so as not to have to pay taxes on it as a withdrawal. I am over 60, so their was no early withdrawal penalty, but I did have to pay income tax on the withdrawal as the investment in my friends business is still ongoing. My friend reimbursed me for the additional income tax I had to pay last year. How do I reflect that to the IRS on my 2024 income tax return for last year? As additional income on schedule 1? What should I call it? Thanks.

1 reply

DaveF1006
April 11, 2025

Yes, you need to report it and here is how. 

 

  1. Log into your account
  2. Select Wages and income
  3. Less Common income
  4. Miscellaneous Income, 1099-A, 1099>start
  5. Scroll to the bottom of the page to Other Reportable Income
  6. Other taxable income, answer yes
  7. Then give a brief description of the income and the amount listed..

 

 

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