Message Font: Serif | Sans-Serif
No. of Recommendations: 0
Others have already discussed the 60-day rollover limit, but you probably should refer to IRS Pub 575 for more information (you can download it at

I never got around to filling out the paperwork for a direct rollover to the new company's 401K or an IRA, and so a check was cut, with an amount for taxes taken out (and an amount for early withdrawl penalty?)

Your old employer probably withheld 20% of the balance and forwarded it to the IRS. When you fill out your tax return for the year, the total withdrawal from the 401k added to your taxable income and the 20% they withheld would be added to your "taxes already paid" line on Form 1040; depending on your tax bracket, you might still owe more taxes from the 401k disbursement than what you have already paid. There is also the 10% penalty tax which would also need to be paid.

If you somehow manage to get it straightened out, the amount withheld would become a tax refund (or defray other taxes owed on form 1040).

Good luck,
Print the post  


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.