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Are 401k distributions for the year that were used as regular living expenses just added to the regular income line on the Federal tax forms?
Since I lost my job end of September 2016 at age 57 (2~ months short of age 58) due to a RIF at work, I was able to qualify to "officially retire" according to the company rules. I did NOT have to take any distribution from my 401k until January 2018. At which point I took out a one time distribution for the 2018 year to pay all regular expenses, including enough to pay for a new house roof (that was installed in July). I'm allowed to keep my Fidelity 401k with my former employer, and it's exceptional in allowing withdrawals, etc. I'm just no longer allowed to contribute to it, since I'm a retiree and no longer considered a regular employee.
Anyway, my wife still works and earns regular income, so that is obviously filed normally on the regular line, but I am retired and only have the 401k distribution income. This year when I file taxes, will be the first year I've ever had to file after taking a 401k distribution.
I expect that's added to my wife's income amount, and filed on the tax forms on the line for income just as if it was normal paycheck earned income.
Not quite.
401k distributions are reported on Form 1040 separately under Pensions and Annuities, which is Line 4a & 4B of the all-new 1040. Wages are reported on Line 1.
Fidelity will send you a Form 1099-R showing the distribution (and any withholding tax deductions).
Also, I hope you timed the distribution to occur after you turned age 59 1/2 . ( May 2018 ??) If not you may owe a 10% penalty.
"If you are under age 59½ when a distribution is paid to you, you may have to pay a 10% tax (in addition to the regular income tax) on the taxable part (including any tax withheld) " https://www.irs.gov/publications/p575
Not quite.
401k distributions are reported on Form 1040 separately under Pensions and Annuities, which is Line 4a & 4B of the all-new 1040. Wages are reported on Line 1.
Fidelity will send you a Form 1099-R showing the distribution (and any withholding tax deductions).
Also, I hope you timed the distribution to occur after you turned age 59 1/2 . ( May 2018 ??) If not you may owe a 10% penalty.
"If you are under age 59½ when a distribution is paid to you, you may have to pay a 10% tax (in addition to the regular income tax) on the taxable part (including any tax withheld) " https://www.irs.gov/publications/p575
Thanks, I'll look those new ones up!
As for the age '59-1/2' rule, that doesn't apply to me. I qualified under the "OVER age 55, and lost your job due to a R.I.F." exception rule. Officially though, I was age 59 and 1 month old at my first distribution.
Yes! 401(k) plans have an earlier exemption age for anyone who has a 'separation of service' from the employer associated with/sponsoring the 401(k) plan.
As for the age '59-1/2' rule, that doesn't apply to me. I qualified under the "OVER age 55, and lost your job due to a R.I.F." exception rule. Officially though, I was age 59 and 1 month old at my first distribution.
FWIW, the bolded part above is irrelevant. It doesn't matter if you were RIFFed, fired, quit, or retired. The only thing that is relevant is that you left your employer after attaining the age of 55.
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