You took a $100,000 distribution by check from your 401(k) and are now wondering if the IRS will penalize you. The answer depends on whether you completed the rollover correctly. A check isn’t necessarily problematic, but missing this deadline could cost you roughly $34,000 in taxes and a penalty.
The 60-Day Deadline and What Happens When You Miss It
Once you receive the check, you generally have 60 days to deposit the full distribution into an IRA or another eligible retirement plan. Miss the deadline and the amount may become taxable income for that year. If you’re under 59 ½, a 10% early withdrawal penalty may also apply. 1
Your 401(k) plan…
Read the full article at SMARTASSET.COM
