Have a Tax Question? Ask a Tax Expert
Good morning. Having been the former administrator of our 401k plan at our law firm that was held by Fidelity...I will tell you I think you have nothing to worry about. Fidelity does make mistakes, but when they do, my experience has always been that they make things right. These kinds of mistakes get made and Fidelity and other similar entities are experienced in remedying the problems. Just stay on top of this, and I feel sure Fidelity will get this taken care of for you. It is, after all, not entirely simply their customer service credo...in the end if this doesn't get fixed, they are going to be liable for your damages resulting from their mistake.
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I would ask Fidelity to issue you a corrected 1099 so that you don't even have to deal with the IRS on this issue. Failing that, i would demand that Fidelity provide me a letter of explanation so that you could attach it to your return explaining why it is not an early withdrawal.
Hi, I will try to pick up this question.
As far as the 5498- you do not enter that anywhere on the tax returns. It is just information reporting.
As far as the 1099 showing early withdrawal - report it on the tax return and show that it is not taxable. You may generate some correspondence. But it sounds like you have a reasonable story and should not have any tax, penalties or interest to deal with when it is all done
I also agree with the previous consultant. Getting Fidelity to issue a corrected 1099 would eliminate any issues with the IRS.