No the money is not "taken out" as in gone, it is a withholding, similar to your income tax withholding. When you file your taxes next year, you will list this with all your other withholdings, your actual taxes will be taken from this total, if the taxes are less you get the reminder back.
So, if you put the money into an IRA, and don't spend it, thus turning it into "Income" you won't be taxed on it, and you will get the withholding back. Convoluted, I would talk to a tax professional to make sure all the I's get dotted and T's get crossed. But at the moment the government is only holding the tax pending your future action. PS. You should have 90 days to convert the pay out back into a retirement account without penalty. I recently received a check such as this, but I went ahead and kept it and accepted the penalty. Since the entire check amount was something like $1.23. I think I can cover that 12 cent penalty I will have next year. -------------- Ian Skinner Web Programmer BloodSource www.BloodSource.org Sacramento, CA "C code. C code run. Run code run. Please!" - Cynthia Dunning ....-----Original Message----- ....From: Deanna Schneider [mailto:[EMAIL PROTECTED] ....Sent: Friday, April 01, 2005 6:33 AM ....To: CF-Community ....Subject: IRA Rollover Questions .... ....So, my husband's company went belly up and he had a small retirement ....plan with them. Since they're belly up - he had to roll over his ....retirement plan into an IRA or something. So, he went to the credit ....union and talked to them and they took the paperwork to send to the ....investment company. .... ....Lo and behold, we get a check for Aaron's retirement - as a cash out - ....not as a rollover. With all the federal taxes taken out, of course. ....The investment firm says they never got the paperwork. .... ....Sooo, the question is - how would you handle it? The investment firm ....says they can't "un-do" the cash out, but if he puts it back in an IRA ....he'll get a "credit" on 2005 taxes. My coworker says that if he ....doesn't put it back in an IRA, he'll get an additional 10% penalty ....taken out. I say he's sort of screwed in that even if he gets a ....credit, it's on the remaining money and the tax that's already been ....taken out is gone for good. (IE the credit I doubt will equal the tax ....removed.) .... ....But, I don't really know much about this stuff. The best case scenario ....would be to someone get the credit union to either prove that they ....sent the paperwork or prove that they fucked up and make them work ....with the investment firm to "un-do" the cash out. But, the chances of ....that happening are slim. .... ....So - you investment/tax experts. What's the scoop? Will there be an ....additional 10% penalty? I'm sure the state will want its cut of taxes, ....since only fed taxes were removed. How big will the "credit" be? ....Thoughts? .... .... ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~| Discover CFTicket - The leading ColdFusion Help Desk and Trouble Ticket application http://www.houseoffusion.com/banners/view.cfm?bannerid=48 Message: http://www.houseoffusion.com/lists.cfm/link=i:5:152544 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=89.70.5 Donations & Support: http://www.houseoffusion.com/tiny.cfm/54
