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If a taxpayer rec'd a 1099-R distribution from a qualified

Customer Question
if a taxpayer rec'd a...
if a taxpayer rec'd a 1099-R distribution from a qualified plan (job was downsized away), does the taxpayer have to pay regular income tax on the entire distribution in the year rec'd (2016). Taxpayer born 1968
JA: The Accountant will know how to help. Is there anything else the Accountant should be aware of?
Customer: Federal tax and state tax was withheld from the entire distribution...
Submitted: 10 months ago.Category: Tax
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Answered in 3 minutes by:
2/7/2017
Tax Professional: Lane, JD, CFP, MBA, CRPS replied 10 months ago
Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 12,999
Experience: Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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Hi - Yes, unless the dollars were rolled into an IRA, there will be ordinary income tax on the distribution and then the 10% early retirement penalty tax for a distribution before age 59 and 1/2 (age 55 and separationg from service for workplace plans)

..

The withholdoing, however, just as withholding from wages, will go to reduce that tax dollar for dollar when it's applied on the return.

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Tax Professional: Lane, JD, CFP, MBA, CRPS replied 10 months ago

The amount of tax will depend on your tax brack for the year (what that distribution and your other income for the year put you in), and again the 10% is additonal at the federal level.

...

So if you wre in the 15% bracket, and the mandatory 20% was withheld, you may owe a LITTLE more at tax time, becasue the additionalearly retirement penalty would make the effective rate on that 25%

...

Please let me know if you have ANY questions at all, before rating me

I hope you’ll rate me (using those stars, or faces on your screen, by clicking submit) based on thoroughness and accuracy, rather than any good news / bad news content.

That’s the only way JustAnswer will compensate me for the work here.

Thanks,

Lane

I hold a law degree, with concentration in Tax Law, Estate law & Corporate law, an MBA, with specialization in finance, a BBA, and CFP & CRPS designations, as well - I’ve been providing financial, Social Security/Medicare, estate, corporate, non-profit, and tax advice, since 1986.

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Lane
Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
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