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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 13326
Experience:  15years with H & R Block. Divisional leader, Instructor
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This past year I recently got divorced and I was entitled to

Customer Question

This past year I recently got divorced and I was entitled to half of my ex-wife's 401k. I withdrew the money due to the fact that I was going through hard times and pay taxes on it do I have to claim that as income at the end of the year? Also are attorneys fees for divorce tax deductible?
Thanks
Josh
Submitted: 8 months ago.
Category: Tax
Expert:  Robin D. replied 8 months ago.

Hello

Yes the retirement is counted as income. If you did not have it put into an account that remained deferred for taxes then it is taxable.

You do not have to pay the 10% penalty.

Attorney fees for divorce are personal in nature and not allowed as a deduction.

Please remember to rate my service excellent once you have all the information you need. If you have any other questions, please ask me – I’ll be happy to respond. Thank you!

Customer: replied 8 months ago.
I paid the penalty to withdraw cash from the 401 k that was due to me to the divorce. So you're telling me I have to claim that as income after I went through the whole Quadro and that was what we agreed on our settlement?
Expert:  Robin D. replied 8 months ago.

The QDRO was to move the money to your account without taxation. You stated you took the money out so it is taxable now.

The taxable event occurred when you took the money out to use.

That money remained tax deferred until you withdrew it and did not put it in another account that was tax deferred too.

Expert:  Robin D. replied 8 months ago.

DO you understand the difference in the actions you took?

Customer: replied 8 months ago.
No.
Expert:  Robin D. replied 8 months ago.

The QDRO was to get you half of the 401k and put it in your name.

That is not taxable that is a division of assets. That made sure that you would get your share.

Then you took the money out of the account. Taking money out of a retirement account is taxable. You cannot avoid tax on money that has never been taxed (like that 401k). You took it out so you must include it or the IRS will include it for you and reassess your return.

Expert:  Robin D. replied 8 months ago.

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