> Deanna wrote: > So, my husband's company went belly up and he had a small retirement
My wife who's usually knowledgable about these things says this: I'd say do the IRA if a) the $ is a decent amount and b) she can come up with the amount taken out as taxes. The issue is that unless she makes a "whole" contribution (meaning the check she received + the taxes that were withheld), there will still be a penalty. If the investment co. took out the taxes in 2004 (i.e., these taxes showed up on her 2004 1099-R), she could recover the tax $ quickly by putting the money (check + make-up-taxes cash) into a 2004 IRA (still an option until 4/15/05) and filing an amended tax return for 2004. If not, same process, but will have to be a 2005 IRA, and she won't get the cash for the overpaid taxes until she files her 2005 return. The "credit" should essentially be a refund of overpaid taxes. There's no fixed "credit" - it's just that she will now have overpaid $X (whatever was taken out as taxes) and should get $X back. The other option is to fight with the credit union / investment company. That may be worthwhile if she can't come up with the cash to replace the taxes, which is especially likely if the 401k was of a decent size (e.g. 401k was $50k and now she needs to come up with $50k * 20% taxes withheld = $10k). Also, if it's a decent size, that means the 10% penalty may be substantial. She also added, "at least I think that's right." ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~| Find out how CFTicket can increase your company's customer support efficiency by 100% http://www.houseoffusion.com/banners/view.cfm?bannerid=49 Message: http://www.houseoffusion.com/lists.cfm/link=i:5:152537 Archives: http://www.houseoffusion.com/cf_lists/threads.cfm/5 Subscription: http://www.houseoffusion.com/lists.cfm/link=s:5 Unsubscribe: http://www.houseoffusion.com/cf_lists/unsubscribe.cfm?user=11502.10531.5 Donations & Support: http://www.houseoffusion.com/tiny.cfm/54
