RPM-
Got a question. Did you take the money out of and put it in your checking account?
If it is still sitting with your employer but haven't added anything to it you are ok.
But if you took it out and added it to say checking account.
Here is the deal.. you have 60 days to roll it over into an IRA. If not IRS will know because you signed a distribution form and the old employer will report it to IRS. It becomes ordinary income and you also have to pay a 10% penalty.
Got a question. Did you take the money out of and put it in your checking account?
If it is still sitting with your employer but haven't added anything to it you are ok.
But if you took it out and added it to say checking account.
Here is the deal.. you have 60 days to roll it over into an IRA. If not IRS will know because you signed a distribution form and the old employer will report it to IRS. It becomes ordinary income and you also have to pay a 10% penalty.
My best advice to you is don't screw with the IRS. They have more powers than any other legal creditor that I know. Just take your medicine and move on because you always be wondering if they'll come after you in the future. A guy with whom I work neglected to pay the "correct" amount and the IRS was all over him like a pet 'coon. He had to declare bankruptcy because he couldn't pay his credit card bills, his boat and back taxes. It may look easy and you may evade detection but if you're caught you're toast.
I'm assuming that the amount in question is considerable so you have to crunch the #'s to see if you're comfortable taking the risk. For example, $50,000 might not seem like a great deal of money, but I bet you would owe a minimum of $9,000 in penalties and interest after just 3 years.
Good Luck
I'm assuming that the amount in question is considerable so you have to crunch the #'s to see if you're comfortable taking the risk. For example, $50,000 might not seem like a great deal of money, but I bet you would owe a minimum of $9,000 in penalties and interest after just 3 years.
Good Luck
RPM,
A couple of things you may not be aware of. If your ex-employer sent a distrubution directly to you then legally they had to withhold 20% and notify the IRS. I guess the good part is you have already paid a 20% tax on it in a sense, bad part is the IRS knows you have the distribution.
A couple of things you may not be aware of. If your ex-employer sent a distrubution directly to you then legally they had to withhold 20% and notify the IRS. I guess the good part is you have already paid a 20% tax on it in a sense, bad part is the IRS knows you have the distribution.
