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.
Learn more about notice CP05B, why you received it, and how to handle an IRS CP05B notice with help from the tax experts at H&R Block.
With CP2000 notices, make sure you preserve your rights when you respond to the IRS. Mainly, your right to protest penalties and your right to appeal.
Learn what to do if the IRS asks for more information to process your business tax return or sends a notice about changes to your business return.
If you owe tax debt for another tax year, your refund can be taken to pay the tax debt. Learn more about the Treasury Offset Program from H&R Block.