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nothlit t1_jad3rdu wrote

You deposit this check in your bank account, then you write a new check for this amount + the missing taxes and deposit that into your new 401k or IRA as a rollover within 60 days. Then when you file your 2023 tax return you’ll be credited for the withheld taxes, which will reduce the amount you owe or increase your refund by that amount.

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iguesswhatevs OP t1_jad42v7 wrote

Read my edit and see what you think

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nothlit t1_jad4kyc wrote

> Edit: what if I just put it into my personal Roth IRA since the taxes have already been taken?

20% is the default withholding. You may end up owing tax at a higher or lower rate than 20% based on how much overall income you have this year. You can make more than one deposit as part of a rollover. You could deposit this check and then also deposit a second check to make up the missing 20%. As long as you indicate that both deposits are part of a rollover, it’s fine. If you only deposit this check but not the missing 20%, then the missing 20% will be further subject to an early withdrawal penalty when you file your taxes.

> And then select 2022 rolll over instead of 2023 contributions? Can I do that?

You don’t have to select a year for a rollover

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iguesswhatevs OP t1_jad5r3r wrote

Wait so I’m being taxed on the 20% that has already been taxed?? I don’t understand that. The 21% is just federal taxes withheld from me

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nothlit t1_jad701d wrote

If you are under age 59.5, any money that leaves a retirement account and does not enter another retirement account is subject to the 10% early withdrawal penalty.

Withholding is just a prepaid estimate of tax. Your actual tax may be higher or lower, depending on other factors.

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iguesswhatevs OP t1_jad7e8c wrote

So what you’re saying is that 21% federal income tax PLUS 10% withdrawal fee?

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nothlit t1_jad8c8k wrote

You would pay 10% additional tax on the amount that was withheld and not rolled over

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