No. of Recommendations: 0
. He told me to enter this on my 2000 taxed as a pension distribution and that I would get a 1099-R but not until the end of 2000. Does this sound kosher that I would only get the 1099-r at the end of the year?

Yep. That how it works. A company produces 1099R's immediately after the close of the calender year in which the distributions take place. So the 401k company is producing 1099R's for year 2000 during January 2001 (by law they are due by January 31). Since your 401k refund will be distributed in 2001 (and not 2000), there is no distribution to report on 2000 calander year 1099R. Rather, the distribution will take place in 2001. Even though you won't receive your 1099R until next year, the 401k company will report it NOW to the IRS (so they'll be looking for you to report it!) as a 2000 distribution. When you receive your 1099R next year, the distribution code will be a "p" as in Prior year distribution. Make sense? If not, post a flwup and I'll try again.

Also can I still contribute 1900 to a simple IRA which I have through another job, to reach my limit of 10500 of tax deferred income?

The $10,500 limit is an elective deferral limit (your contribution to a 401k plan) for a calender year. It does not apply to IRA's. The only way you could have reached the $10,500 for 2000 is if you had been eligible and participanting in another 401k plan. Since that's unlikely (and 2000 is now history) it's no longer a possiblility.

Hopefully your employer will work with their 401k provider to address the issues that are causing the nondiscrimination test to fail (and thus causing you to take a refund). There are steps they can take to reduce or eliminate these refunds in the future.

Good luck!


Print the post  


The Retirement Investing Board
This is the board for all discussions related to Investing for and during retirement. To keep the board relevant and Foolish to everyone, please avoid making any posts pertaining to political partisanship. Fool on and Retire on!
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.