Taxes

[Kheldarson]

Working on the taxes. Get Kabe's W2 from Walmart. Tax refund drops like a stone. Seems that Walmart didn't withhold any federal taxes for him! Brilliant.

He cashed out the retirement fund with them after he got fired. But apparently they didn't withhold enough tax there either, so we owe on that too!

And let's not go into the fact that none of my student loan companies are releasing their paperwork until next week or that I have no idea when I'll be getting my paperwork from my freelance job.

This is the most inefficient system ever!

[Greenday]

What was his retirement plan? A 401k? If so, that's why it wasn't taxed. Money goes in pre-tax and you don't get taxed on any of it til you take it out.

[KabeRinnaul]

I knew that, but I'd already paid about 40% on it because I had penalty taxes for early withdrawal, even though I was required to withdraw it after leaving the company because the total amount was too small.

[Dreamstalker]

I may or may not be getting a 1099 from my freelance 'on-call' job. They kinda messed me up last year by sending/filing it a fair bit after I had already filed (and a month after they were legally required to issue it), so I wound up owing even though I had a refund...that was confusing.

Now I find out their nonprofit status with one government is in question as the accountant (same one who delayed my 1099 and never even told me I had one) didn't file properly with them for the past 3 years and they owe quite a chunk of change to get it fixed.

[HYHYBT]

The penalty and the tax are two separate things. You have to pay both.

[s_stabeler]

not to mention that you were actually extremely badly advised- you are NEVER forced to withdraw funds early. You MAY have been required to roll the 401k into an IRA- which would have allowed you to avoid the withdrawal penalty and the taxes-but you can't be forced to take an early withdrawal. There's not anything you can do about it now, i think, but it's worth noting for the future.

[TheHuckster]

not to mention that you were actually extremely badly advised- you are NEVER forced to withdraw funds early. You MAY have been required to roll the 401k into an IRA- which would have allowed you to avoid the withdrawal penalty and the taxes-but you can't be forced to take an early withdrawal. There's not anything you can do about it now, i think, but it's worth noting for the future.

^ This.

IIRC you always have some grace period to roll over your 401k if you need to. The only thing you have to make sure of is if you do so, they'll still give you a tax document that you have to attach to your 1040 to claim, even though it results in no increase in your tax obligation for that year.

[Cia]

Working on the taxes. Get Kabe's W2 from Walmart. Tax refund drops like a stone. Seems that Walmart didn't withhold any federal taxes for him! Brilliant.

Does he remember the number of deductions he wrote on his W-4 and if he claimed Single, Married or Married, but withhold at higher Single rate? If they screwed up his Withholdings you might be able to bring this up to the IRS.

[Aragarthiel]

Does he remember the number of deductions he wrote on his W-4 and if he claimed Single, Married or Married, but withhold at higher Single rate? If they screwed up his Withholdings you might be able to bring this up to the IRS.

Hubs's job did this his first year there, and we almost ended up owing for it (we got like $82 back). His second year at his job, before they even sent the W-2s out they mailed letters to all of the employees stating "Your W-2 is incorrect, here are the corrected values..."

This year, they sent out incorrect W-2s AGAIN, but failed to realize the mistake in time. We've already filed and are now wondering how much the incorrect values are going to impact the refund we were expecting.