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401K withdrawal (1099-R)

Forum|Forum|6 years ago
February 3, 2020
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After I entered my 1099-R in, why did my federal/state refund amount decrease? Why do I now owe state taxes? I have always received a state refund, but this year it's different.

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Best answer by AnnetteB6

It depends on the details of your 401k withdrawal.

If it was an early distribution, then the distribution amount will increase your taxable income (on your Federal return and state as well) and you may also owe a 10% early distribution penalty on your Federal return. Plus, if you did not have taxes withheld, then your refund will certainly be reduced to cover the additional taxes on the distribution.

If your withdrawal was rolled over into an IRA, be sure to double-check the information that you entered from your Form 1099-R and also pay close attention to all the follow-up questions that come up after entering the Form 1099-R. Those questions help to determine how much of the distribution is taxable, if any.

A

AnnetteB6Answer

It depends on the details of your 401k withdrawal.

If it was an early distribution, then the distribution amount will increase your taxable income (on your Federal return and state as well) and you may also owe a 10% early distribution penalty on your Federal return. Plus, if you did not have taxes withheld, then your refund will certainly be reduced to cover the additional taxes on the distribution.

If your withdrawal was rolled over into an IRA, be sure to double-check the information that you entered from your Form 1099-R and also pay close attention to all the follow-up questions that come up after entering the Form 1099-R. Those questions help to determine how much of the distribution is taxable, if any.

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ELuap55

I received a 1099-R for a rollover of a 401K to a traditional IRA. None of the amount in box 1 is taxable, and that's 'ok' BUT, it somehow is now income as income so affects my gross and therefore puts me in a higher tax bracket. (This makes no sense as I already had this same amount in a 401K.)