posted
Well, that's too bad. Could you pay with a credit card or something so as to hurry the whole process up?
Posts: 16059 | Registered: Aug 2000
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posted
I would question that - if the check has not been cashed it should have been returned to them (seeing as how you had moved)and then you shouldn't have to pay a stop request, besides the check is 2 years old and should not be able to be cashed.
Posts: 153 | Registered: Aug 2002
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posted
I did question it, for just those reasons. They said that if the check was being sent to the same address it would be an issue, but to send it to a different address they needed to do it this way. Which says to me that it's not really a stop-check fee, but some other administrative fee, but that's what they insisted on calling it. And they will only accept a certified check.
Posts: 7954 | Registered: Mar 2004
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posted
Eljay, You have 60 days from the date on the check to roll it over - even if it is made out to you, then on your 2004 taxes you would list the amount and write rollover next to it you will owe no taxes until you withdraw it from your 401(k). If you want to keep the money and use it now you will report it on your 2004 taxes and pay tax on it normally without being charged the interest and penalities.
[ October 22, 2004, 08:24 PM: Message edited by: Arthur ]
Posts: 153 | Registered: Aug 2002
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posted
This has been an amazing day! Great that it works out so well.
the tax penalty on using your retirement account money is so high that you'd be better off rolling it over than EVER spending it at this point. You can finance the motorcycle another way and lose a lot less in taxes.
Posts: 22497 | Registered: Sep 2000
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posted
Arthur... are you sure? The financial company seemed pretty sure that I would not be able to do that and would have to take the tax hit. I would love to be able to do this instead... although I still need to come up with $900 that I hadn't been planning on. 60 days is plenty, however, to take care of that.
Bob -- I was kidding on the motorcycle. This is retirement money, and that's where it's staying, one way or another.
Posts: 7954 | Registered: Mar 2004
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Boon
unregistered
posted
Even if Arthur's not sure, I am. Just make sure you add the amount withheld for taxes when you roll it over. (The amount withheld will then show up as a credit on your return, so you won't really be out that money...but you will have to come up with it first.)
It's usually best to email me if you need to ask me a question. AJ's right, I do have some personal stuff going on right now, but I'm happy to help with this stuff.
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Okay, thank you! The link still doesn't seem to address my exact situation, but I bet it's rare enough that it wouldn't be documented on-line. I will trust my Hatrack experts.
The $899 isn't that big a deal, but I do have to say I'm glad it's October, so I won't be out the money for too long!
Posts: 7954 | Registered: Mar 2004
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posted
Ah, gotcha. So very literal, these tax laws. Posts: 7954 | Registered: Mar 2004
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Boon
unregistered
posted
Yep, so when you roll it over, just add enough from your personal funds to cover what they held out. That way you'll avoid all penalties for early withdrawal. If you just rollover the amount of the check, you'll still get penalties for the amount of the taxes they held out. Ridiculous, I know...the IRS sucks.
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So, the check came on November 3rd, with a date of November 2nd, they overnighted it to me. But I didn't want to do anything with it until I heard back from the IRS, just to be safe. Since I had 60 days, I figured I could wait a while before depositing it.
On December 2nd I got a letter from the IRS. Stating that they had received my letter and would respond within 60 days.
I decided to continue to wait until the week before Christmas to make the deposit. I had until January 2nd, but I wanted to be sure the credit union had time to process it and stuff.
No word from the IRS, and I got busy right before Christmas, so I ended up adding the check plus the $899 of my current funds to my credit union IRA last Monday, December 27.
Last night when I got home, there was an envelope from the IRS. I almost couldn't open it. It's amazing how these things make your stomach drop, even when you're pretty sure you're right.
quote:CLOSING NOTICE
Thank you for providing us with additional information about the issue we recently wrote to you about. We are pleased to tell you that, with your help, we were able to clear up the differences between your records and your payers records...
YAY!
Thank you, once again, to all of Hatrack for all the wonderful advice and support I got on this thread. It really helped, both with knowing what to do and fighting down the initial panic. And I promise to be more responsible with my retirement funds going forward. Posts: 7954 | Registered: Mar 2004
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It's in on of the credit union CDs now, I'm not sure if index funds are an option. I reevaluate the funds my current 401K are in every January and July anyway, so I'll probably go over my choices on the IRA again when I do that, too.
Posts: 7954 | Registered: Mar 2004
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posted
Cool. Long-term investments need to be more heavily in equities (stocks). If your CU doesn't offer them, there's plenty of firms such as Vanguard who will help you make the switch easily.
Asset allocation is the second most common mistake in retirement savings, behind not saving enough.
posted
So glad to hear it all worked out so well! Posts: 8355 | Registered: Apr 2003
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Boon
unregistered
posted
quote: Just a little question... shouldn't the IRS refund the money already paid to them, since it's going back into a retirement plan?
Yep.
quote: Just make sure you add the amount withheld for taxes when you roll it over. (The amount withheld will then show up as a credit on your return, so you won't really be out that money...but you will have to come up with it first.)
posted
Yep, I'll get it back when I do my taxes, I just had to come up with the difference up front first, so it was the same amount going in.
And Dags, I totally agree with you... over 80% of my retirement money is in stocks. But since I'm a long way from retirement, I probably will end up pushing this money into something more aggressive, too.
Right now I'm just happy I have it.
Posts: 7954 | Registered: Mar 2004
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