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04-03-2008, 06:44 PM
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#1
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Recycles dryer sheets
Join Date: Dec 2006
Posts: 432
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IRA w/d Tax question
Do you have to report a Rollover IRA early w/d when you do you local taxes?
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04-03-2008, 07:06 PM
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#2
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Dryer sheet aficionado
Join Date: Apr 2008
Posts: 33
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Withdrawals, whether early or qualifying, are generally subject to federal, state, and local taxes if applicable when withdrawing pre-tax money.
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04-03-2008, 07:14 PM
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#3
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Recycles dryer sheets
Join Date: Dec 2006
Posts: 432
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Thanks.
What's the worst that could happen if you choose not to report it on local tax? Penalties, interest, etc...Could that result in a federal tax audit?
Can you call your local tax office and set up a payment plan or request an extension?
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04-03-2008, 07:17 PM
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#4
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Dryer sheet aficionado
Join Date: Apr 2008
Posts: 33
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Well, not reporting taxable income is naughty  I would think that most local tax authorities have their own set of rules regarding penalties, interest, extensions, etc. That is something you'd probably have to check with your local tax office to see what options are available.
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04-03-2008, 07:23 PM
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#5
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2005
Location: Chicago
Posts: 12,625
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Quote:
Originally Posted by JohnDoe
Thanks.
What's the worst that could happen if you choose not to report it on local tax? Penalties, interest, etc...
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You'll be subject to whatever penalities your local governing body specifies for failing to report income. Since, I believe, 1099's are issued for withdrawals from deferred accounts, detecting your failure to report will likely be noticed.
When they notify you of your omission, tell them you were just testing to see if their computers were set up to check for this. They always get a kick out of that! I understand some local authorities arrange to have your skin pulled off in narrow strips with rusty tongs.
__________________
"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
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04-03-2008, 08:26 PM
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#6
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Full time employment: Posting here.
Join Date: Aug 2006
Location: Columbus
Posts: 769
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04-03-2008, 10:03 PM
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#7
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Aug 2004
Location: Laurel, MD
Posts: 7,293
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I get 1099's for my early withdrawals. There is box that could be They are reported on line 15 of form 1040 so they are included in my AGI and therefore rollover to my state return. I use turbotax which queries me to determine if the distribution is a rollover or excepted from the 10% penalty. Many state returns start with your Federal AGI or taxable income, so you would have to actively deduct the distribution amount (as opposed to just omitting that amount from the state return).
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04-04-2008, 05:09 AM
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#8
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Thinks s/he gets paid by the post
Join Date: Jun 2006
Location: Central, Ohio, USA
Posts: 2,635
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Quote:
Originally Posted by JohnDoe
Thanks.
What's the worst that could happen if you choose not to report it on local tax? Penalties, interest, etc...Could that result in a federal tax audit?
Can you call your local tax office and set up a payment plan or request an extension?
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Penalties are different for every state. Depending on what they can prove (ow what you will admit, if caught), it could be as little as payment (along with some penalties) up to an including maybe felony perjury (read the fine print where you sign the tax return). Not a good idea in any case. I am reasonably sure, if you contact them, they will work out a payment plan and otherwise work with you to get the money.
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Vietnam Veteran, CW4 USA, Retired 1979
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