How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Brenda Guy Your Own Question
Brenda Guy
Brenda Guy , Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 151
Experience:  20 years of working with income and estate tax issues for families and businesses.
Type Your Tax Question Here...
Brenda Guy is online now
A new question is answered every 9 seconds

My wife lost her job in February 2010 and had an outstanding

Customer Question

My wife lost her job in February 2010 and had an outstanding loan against her 401K of $43,315. In order to avoid early withdraw penalties and taxes due on the amount; we wanted to repay the loan. The original 401K was held at Fidelity Investments. In discussions with them they told us the payment would be due in June 2010. We called Fidelity in June to get the address to overnight the full repayment and were told the payment had to be made by July 17. I double checked with them because I wanted to make sure it was the correct date and they confirmed this. This is all recorded on a recorded line at Fidelity. It turns out the Fidelity Rep was mistaken as he was looking at my wife’s pension roll over account also held by Fidelity, which had to be rolled over in July. The loan was due in June and we therefore paid it off late when we made the payment in July.
Fidelity is telling us not to worry. I just got the 1099 and it is coded 1 in box seven for early withdrawal. When I spoke to them they said they would be issuing a form 5498 after April 15th showing the contribution as a roll over. My business tax advisor doesn’t think this is going to work and that I am going to get a letter demanding payment of the penalty and taxes. I am wondering what you think?
Submitted: 5 years ago.
Category: Tax
Expert:  Richard replied 5 years ago.

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 the end if this doesn't get fixed, they are going to be liable for your damages resulting from their mistake.



I hope this has given you the guidance you were seeking. I wish you the best of luck!


If you have a follow-up question, please remember that there might be a delay between your follow up questions and my answers because I may be helping other clients or taking a break.


If I have adequately answered your question, even though the answer might not have been the one for which you hoped, I would appreciate it if you would please click the GREEN ACCEPT button so that I receive credit for my work; otherwise, though you have made a deposit, I do not receive credit.

If you need additional clarification on this question after clicking ACCEPT, please do not hesitate to click Reply and I will be happy to do what I can to help you further. Thanks for allowing me to be of service to you.


The information given here is not legal advice. As all states have different intricacies in their laws, the information given is general only. This communication does not establish an attorney-client relationship with you. I hope this answer has been helpful to you.

Customer: replied 5 years ago.
So technically what would I do on the 1040, not enter the 1099 or offset it somehow with an entry showing a contribution via the form 5498, and where would I do that? Or should I seek to get Fidelity to correct the 1099?
Expert:  Richard replied 5 years ago.

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.

Customer: replied 5 years ago.
I am sorry but you are not really providing me with any more information than I already have...Fidelity is reluctant to reissue the 1099, I want to know about how the form 5498 is entered and if I use this can I expect a letter from the IRS>
Expert:  Richard replied 5 years ago.
I'm sorry. I will opt out and let someone else help you. Take care.
Expert:  Brenda Guy replied 5 years ago.

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.

Brenda Guy, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 151
Experience: 20 years of working with income and estate tax issues for families and businesses.
Brenda Guy and 2 other Tax Specialists are ready to help you

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
< Previous | Next >
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
  • I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight. Bonnie Chesnee, SC
  • Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation. John Minneapolis, MN
  • Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with. Orville Hesperia, California
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex Los Angeles, CA
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP Hesperia, CA

Meet The Experts:

  • Wallstreet Esq.

    Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    10 years experience
< Last | Next >
  • Wallstreet Esq.'s Avatar

    Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    10 years experience
  • Mark D's Avatar

    Mark D

    Enrolled Agent

    Satisfied Customers:

    MBA, EA, Specializing in Business and Individual Tax Returns and Issues
  • Richard's Avatar


    Tax Attorney

    Satisfied Customers:

    29 years of experience as a tax, real estate, and business attorney.
  • Robin D.'s Avatar

    Robin D.

    Senior Tax Advisor 4

    Satisfied Customers:

    15years with H & R Block. Divisional leader, Instructor
  • Megan C's Avatar

    Megan C

    Certified Public Accountant (CPA)

    Satisfied Customers:

    Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
  • jgordosea's Avatar


    Enrolled Agent

    Satisfied Customers:

    I've prepared all types of taxes since 1987.
  • R. Klein, EA's Avatar

    R. Klein, EA

    Enrolled Agent

    Satisfied Customers:

    Over 20 Years experience