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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 15613
Experience:  15years with H & R Block. Divisional leader, Instructor
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I am wondering. I emptied my 401 K due to the stack market

Customer Question

I am wondering. I emptied my 401 K due to the stack market falling. That was feb. Now I am wondering how I can avoid paying too much tax on it. The amount was 46,000. What can I do, reinvest some in an ira?
JA: The Accountant will know how to help. Is there anything else the Accountant should be aware of?
Customer: No, I and Wife are retired I am 69 her 65
Submitted: 11 months ago.
Category: Tax
Expert:  Robin D. replied 11 months ago.

Hello, I'm Robin. Welcome to JustAnswer. I'm reviewing your question now and typing up my reply. I'll post that in just a few moments.

Expert:  Robin D. replied 11 months ago.

Putting some money from a 401k into an IRA is called a Rollover. You only have 60 days to complete a rollover if you do not want to pay tax on that amount of the distribution.

Unfortunately the 60 days has passed.

You will not have any penalty but at this point the full distribution will be dded to your income for the year.

Please let me know if you need clarification. If you do not then a positive 5 star rating is appreciated so I get credit for the response. (look for the STARS or SMILEY FACES)

Customer: replied 11 months ago.
Why a penalty?
Expert:  Robin D. replied 11 months ago.

If you were under 59 1/2 there would also have been an addition 10% penalty. You are over that so no additional penalty.

Expert:  Robin D. replied 11 months ago.

I added the penalty to save you from asking about that. Most people have heard of the 10% penalty on Early Withdrawals and ask about that too.

Expert:  Robin D. replied 11 months ago.

I sincerely ***** ***** had asked about a rollover before you took the distribution.