If my only income was a lump-sum early withdrawal of my 401(k) plan and SSDI, do I have to file taxes?
Maybe. If your taxable income is high enough, you’ll have to file.
You will be responsible for the taxes on your 401k early withdrawal. Also, depending on the size of your 401(k) distribution, some of your Social Security Disability Income (SSDI) might be taxable.
If your income isn’t high enough to file, you must still file Form 5329 to pay the 10% early distribution tax on your 401(k) withdrawal. This penalty will apply unless you meet a Form 5329 exception. You might qualify for an exception if you took the distribution because you were totally and permanently disabled.
Here are the five things you need to know to respond to the IRS when you get an incorrect CP2000 notice, including how and when to respond.
Need help deciding if you need to file an amended return (IRS Form 1040X)? Get the facts from the tax experts at H&R Block.
The IRS has not received your tax return so they have proposed taxes due. Learn more about IRS Letter 2566 from the tax experts at H&R Block.
The IRS made a change to the Making Work Pay and/or Government Retiree Credit on your tax return. Learn more about IRS notice CP12M from H&R Block.