Question

Do I need to enter 401k from previous employer if I haven't contributed anything since leaving?

Forum|Forum|3 years ago
September 9, 2022
3 replies
0 views

Hi there, hoping this will make sense... So I left a job 2 years ago and still have the 401k there. My new employer does not offer 401k's, so I don't have one with my new job. Am I still supposed to enter/declare/whatever you call it, my "old" 401k even though there have been no contributions to it?? Thank you for any help!

Tax Advice

Critter-3

You have nothing to report ... a dormant 401K account is just that. Nothing went in and nothing came out.

X

xmasbaby0

Employee

You have nothing to enter about a 401k from your old employer unless you take the money out of the account. If you just leave it alone, you do not have to enter anything about it on a tax return. If/when you ever take the money out, then you will have something to enter on a tax return.

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**

A

apple7351Author

Thanks so much!

VolvoGirl

Employee

You only enter 401K contributions from a W2. If you didn't contribute to the 401K you don't report it unless you got a 1099R for a distribution, withdrawal or rollover.

A

apple7351Author

Great, thank you!!

O

Opus 17

Employee

In addition to the above:

You have the option of rolling over the 401k into a private IRA, once you leave service. You can open an IRA at almost any bank or stockbroker. The main difference is that with an IRA, you have complete freedom to invest in anything you want, while the employer may limit the allowable investments in a 401k. On the other hand, large employers can negotiate lower fees so the mutual funds they offer may have lower built in expenses. Also, the rules regarding the 10% penalty for withdrawing funds before age 59-1/2 are somewhat different between a 401k and an IRA.

Some employers may force you to close your 401k after leaving service, especially if the balance is small. In that case, if you roll over the funds to an IRA, you continue to save the money for retirement and don't have to pay taxes or penalties.

Lastly, if you decide to keep the 401k as-is, be sure to log into your account at least once a year to let them know you're alive and keep your phone, address and email updated. If they don't hear from you after a set period of time, your funds could go to your state's unclaimed funds program.