Tax Preparation question

kak125 · #1 02-13-2009, 04:22 PM

So my hubby and I just had our taxes done and they taxed us for my 401k that was rolled over into a Safe Harbor IRA. Instead of getting money back we ended up owing $491. Is this correct? I had the lady at Jackson Hewitt call and double check and she said that was correct but everybody else I have talked to said they have rolled over their 401k's into IRA's and were not taxed for them. I dont get it.

David · #2 02-14-2009, 11:11 AM

Quote:

Originally Posted by kak125

So my hubby and I just had our taxes done and they taxed us for my 401k that was rolled over into a Safe Harbor IRA. Instead of getting money back we ended up owing $491. Is this correct? I had the lady at Jackson Hewitt call and double check and she said that was correct but everybody else I have talked to said they have rolled over their 401k's into IRA's and were not taxed for them. I dont get it.

In '08, I rolled over my 401(k) into a traditional IRA (not a Roth).

You should have a Form 1099-R from the 401 plan administrator. In Box 7 (Distribution Code), you should have a "G" -- which stands for "direct rollover of a distribution to a qualified retirement plan."

On your 1040 tax return, you should put the amount of the rollover in Box 16a. Next, in Box 16b, you should write "rollover" & then put "0" (zero).

Call the IRS to verify everything.

P.S. Did you roll over into a qualified plan within 60 days of taking it out of the 401? Is the IRA you put the money into a traditional or a Roth IRA?

kak125 · #3 02-14-2009, 01:48 PM

Yes you are correct. I had that form and it had the code G in the box. What happened was I switched jobs a while ago and I kinda forgot about my 401k. I got a letter from them saying I had 60 days to roll it over. So I filled out the forms needed and sent them to my 401k company to roll it over into an IRA through TRowe price. A few months went by and I heard nothing so I called my 401k company and they said they never received any papers and that they rolled it over into a Safe Harbor IRA for me. I dont know which type of IRA this is but I called the lady where the IRA is at now yesterday and she said that I shouldnt have had to pay any taxes on it. I dont know what else to do now since Jackson Hewitt already did my taxes. I will have to call the IRS to verify and then go back down there if that is wrong. I wish I knew more about this stuff but thank you for your help.