Need Tax Help- Early 401k Disbursement Penalties HRBlock?

[sweetpeakaris]

In 2012 my DH left a company & requested his 401k funds. We filed the form with our 2012 taxes & paid all penalties in 2012.

Now, I'm using HRBlock to do our taxes & there is a question asking if we received 401k Disbursements in 2011 or 2012, I clicked yes, & next it asked the amount we received, I entered it, then it decreased our refund??

It's like we are being penalized 2 years in a row? Is this the norm or a issue with HBlock? Why would It matter in 2013 if we received 401k Disbursements in 2012 if we already file on previous taxes & paid penalties??

 

[JillyBean1899]

In 2012 my DH left a company & requested his 401k funds. We filed the form with our 2012 taxes & paid all penalties in 2012.

Now, I'm using HRBlock to do our taxes & there is a question asking if we received 401k Disbursements in 2011 or 2012, I clicked yes, & next it asked the amount we received, I entered it, then it decreased our refund??

It's like we are being penalized 2 years in a row? Is this the norm or a issue with HBlock? Why would It matter in 2013 if we received 401k Disbursements in 2012 if we already file on previous taxes & paid penalties??

When you received the 401(k) funds, did you put them in your bank account? Or did you roll them into an IRA? If you rolled them into an IRA, you shouldn't have paid any penalties (I never have).

 

[sweetpeakaris]

When you received the 401(k) funds, did you put them in your bank account? Or did you roll them into an IRA? If you rolled them into an IRA, you shouldn't have paid any penalties (I never have).

It went into the bank. I know about the penalties, but can't figure out why my 2013 return is affected since I already paid all penalties & taxes in 2012.

 

[DisneyFans222]

In 2012 my DH left a company & requested his 401k funds. We filed the form with our 2012 taxes & paid all penalties in 2012. Now, I'm using HRBlock to do our taxes & there is a question asking if we received 401k Disbursements in 2011 or 2012, I clicked yes, & next it asked the amount we received, I entered it, then it decreased our refund?? It's like we are being penalized 2 years in a row? Is this the norm or a issue with HBlock? Why would It matter in 2013 if we received 401k Disbursements in 2012 if we already file on previous taxes & paid penalties??

You only owe taxes and penalties for the tax year in which you personally took the 401K distribution of funds (in lieu of rolling over into a qualifying tax deferred plan).

 

[supersnoop]

You'll need to review you're previous tax returns. There's a grace period for rolling over the distribution, and taxes may have been deferred until that grace period expired. Remember that there is both a penalty and taxes due on the distribution.

 

[wiigirl]

You only owe taxes and penalties for the tax year in which you personally took the 401K distribution of funds (in lieu of rolling over into a qualifying tax deferred plan).

Thats my understanding also.

 

[MomToOne]

I suspect the program is asking you if you had a normal distribution, not an early distribution like your husband took. Is there a "help" button or something you can hit for more information?

 

[sweetpeakaris]

Thanks everyone! I called the IRS & Hrblock, I was told to ignore the question as taxes & penalties are only due the year you recieve the funds, we paid taxes & penalties & filed the paper with 2012 taxes.

Hrblock claim their software question should read 2013, not 2011 or 2012.

 

[wvjules]

Afer last year's H&R Block debacle, I will NEVER use them again! I went back to Turbo Tax. Also, if something looks strange to me, I also put the info into another free file program to see what it comes up with.

 

[HM]

Afer last year's H&R Block debacle, I will NEVER use them again! I went back to Turbo Tax. Also, if something looks strange to me, I also put the info into another free file program to see what it comes up with.

What debacle? We use H&R Block software. I wasn't aware there had been any problems.

 

[wvjules]

What debacle? We use H&R Block software. I wasn't aware there had been any problems.

It was a nightmare for those with education credits. They didn't change their software to report a NO for questions instead of leaving blank as in previous years. Returns were rejected, returns were stuck in limbo, it was a huge mess. It almost cost me my financial aid because I wasn unable to use the FAFSA IRS import tool that was required. I filed in February and got my refund in June! They weren't helpful at all.

 

[wvjules]

It was a nightmare for those with education credits. They didn't change their software to report a NO for questions instead of leaving blank as in previous years. Returns were rejected, returns were stuck in limbo, it was a huge mess. It almost cost me my financial aid because I wasn unable to use the FAFSA IRS import tool that was required. I filed in February and got my refund in June! They weren't helpful at all.

And it looks like they are having problems again this year.

 

[MrEVILdrPorkchop2u]

It was a nightmare for those with education credits. They didn't change their software to report a NO for questions instead of leaving blank as in previous years. Returns were rejected, returns were stuck in limbo, it was a huge mess. It almost cost me my financial aid because I wasn unable to use the FAFSA IRS import tool that was required. I filed in February and got my refund in June! They weren't helpful at all.

We were also one of the customers that had to wait extra long after that whole fiasco. We will NEVER use them again.

 

[Disneefun]

And it looks like they are having problems again this year.

With what? I'm not seeing any widespread reports about anything other than some people complaining about long acceptance times, which could simply be caused by the backlog due to the late beginning of filing season. Is what you're seeing something more than that? Link?