Have a Tax Question? Ask a Tax Expert
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.
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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.
DO you understand the difference in the actions you took?
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.
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