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Haven’t been able to work since Oct 2017. Is there tax due for a 401k withdrawal while totally disabled?
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I have had 14 hand surgeries, one each on my elbow, shoulder and hip. I had 2 knee surgeries and my right knee needs replacement. If the temperature is below 40 degrees, my hands go numb and I can’t use them. I have severe arthritis in both hips and both shoulders. My employer gave me a “ light duty “ job watching someone all day (Jan to May 2018) but it wasn't a permanent job. I haven’t worked light duty since May 10, 2018. The doctor says that I can’t weld anymore. I have been welding for 36 years and it’s all I know how to do (30 years with current employer).
The lawyer says I need to apply for SSD. I took $18,000 from my 401k to pay medical and household bills. Will I have to pay tax on it if I don’t/can’t return to work until 2019 or never?
taxes
edited 15 mins ago
Bob Baerker
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Wolfiebonbon
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I have had 14 hand surgeries, one each on my elbow, shoulder and hip. I had 2 knee surgeries and my right knee needs replacement. If the temperature is below 40 degrees, my hands go numb and I can’t use them. I have severe arthritis in both hips and both shoulders. My employer gave me a “ light duty “ job watching someone all day (Jan to May 2018) but it wasn't a permanent job. I haven’t worked light duty since May 10, 2018. The doctor says that I can’t weld anymore. I have been welding for 36 years and it’s all I know how to do (30 years with current employer).
The lawyer says I need to apply for SSD. I took $18,000 from my 401k to pay medical and household bills. Will I have to pay tax on it if I don’t/can’t return to work until 2019 or never?
taxes
edited 15 mins ago
Bob Baerker
11.6k11743
asked 1 hour ago
Wolfiebonbon
41
New contributor
Wolfiebonbon is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
Also have severe arthritis both hands bone at base of right thumb removed because of it. If I stand up for 30 minutes or more knees ache get stiff. If I sit for more than 20 minutes both hips especially right hip start to ache. Wakes me at night. Employer doesn’t seem to want to find alternative suitable employment. If I retire this year and apply for SSD will i pay tax on withdrawal from 401k used to pay medical/household bills? Lose about $ 500 a month on workers comp am barely getting by
– Wolfiebonbon
1 hour ago
4
There is really not much need to enumerate your ailments.
– Pete B.
1 hour ago
add a comment |Â
up vote
0
down vote
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up vote
0
down vote
favorite
I have had 14 hand surgeries, one each on my elbow, shoulder and hip. I had 2 knee surgeries and my right knee needs replacement. If the temperature is below 40 degrees, my hands go numb and I can’t use them. I have severe arthritis in both hips and both shoulders. My employer gave me a “ light duty “ job watching someone all day (Jan to May 2018) but it wasn't a permanent job. I haven’t worked light duty since May 10, 2018. The doctor says that I can’t weld anymore. I have been welding for 36 years and it’s all I know how to do (30 years with current employer).
The lawyer says I need to apply for SSD. I took $18,000 from my 401k to pay medical and household bills. Will I have to pay tax on it if I don’t/can’t return to work until 2019 or never?
taxes
edited 15 mins ago
Bob Baerker
11.6k11743
asked 1 hour ago
Wolfiebonbon
41
New contributor
Wolfiebonbon is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
I have had 14 hand surgeries, one each on my elbow, shoulder and hip. I had 2 knee surgeries and my right knee needs replacement. If the temperature is below 40 degrees, my hands go numb and I can’t use them. I have severe arthritis in both hips and both shoulders. My employer gave me a “ light duty “ job watching someone all day (Jan to May 2018) but it wasn't a permanent job. I haven’t worked light duty since May 10, 2018. The doctor says that I can’t weld anymore. I have been welding for 36 years and it’s all I know how to do (30 years with current employer).
The lawyer says I need to apply for SSD. I took $18,000 from my 401k to pay medical and household bills. Will I have to pay tax on it if I don’t/can’t return to work until 2019 or never?
taxes
taxes
edited 15 mins ago
Bob Baerker
11.6k11743
asked 1 hour ago
Wolfiebonbon
41
New contributor
Wolfiebonbon is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
edited 15 mins ago
Bob Baerker
11.6k11743
asked 1 hour ago
Wolfiebonbon
41
New contributor
Wolfiebonbon is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
edited 15 mins ago
Bob Baerker
11.6k11743
edited 15 mins ago
Bob Baerker
11.6k11743
edited 15 mins ago
Bob Baerker
11.6k11743
11.6k11743
asked 1 hour ago
Wolfiebonbon
41
New contributor
Wolfiebonbon is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
asked 1 hour ago
Wolfiebonbon
41
asked 1 hour ago
Wolfiebonbon
41
41
New contributor
Wolfiebonbon is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
New contributor
Wolfiebonbon is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
Wolfiebonbon is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
Also have severe arthritis both hands bone at base of right thumb removed because of it. If I stand up for 30 minutes or more knees ache get stiff. If I sit for more than 20 minutes both hips especially right hip start to ache. Wakes me at night. Employer doesn’t seem to want to find alternative suitable employment. If I retire this year and apply for SSD will i pay tax on withdrawal from 401k used to pay medical/household bills? Lose about $ 500 a month on workers comp am barely getting by
– Wolfiebonbon
1 hour ago
4
There is really not much need to enumerate your ailments.
– Pete B.
1 hour ago
add a comment |Â
Also have severe arthritis both hands bone at base of right thumb removed because of it. If I stand up for 30 minutes or more knees ache get stiff. If I sit for more than 20 minutes both hips especially right hip start to ache. Wakes me at night. Employer doesn’t seem to want to find alternative suitable employment. If I retire this year and apply for SSD will i pay tax on withdrawal from 401k used to pay medical/household bills? Lose about $ 500 a month on workers comp am barely getting by
– Wolfiebonbon
1 hour ago
4
There is really not much need to enumerate your ailments.
– Pete B.
1 hour ago
Also have severe arthritis both hands bone at base of right thumb removed because of it. If I stand up for 30 minutes or more knees ache get stiff. If I sit for more than 20 minutes both hips especially right hip start to ache. Wakes me at night. Employer doesn’t seem to want to find alternative suitable employment. If I retire this year and apply for SSD will i pay tax on withdrawal from 401k used to pay medical/household bills? Lose about $ 500 a month on workers comp am barely getting by
– Wolfiebonbon
1 hour ago
Also have severe arthritis both hands bone at base of right thumb removed because of it. If I stand up for 30 minutes or more knees ache get stiff. If I sit for more than 20 minutes both hips especially right hip start to ache. Wakes me at night. Employer doesn’t seem to want to find alternative suitable employment. If I retire this year and apply for SSD will i pay tax on withdrawal from 401k used to pay medical/household bills? Lose about $ 500 a month on workers comp am barely getting by
– Wolfiebonbon
1 hour ago
4
4
There is really not much need to enumerate your ailments.
– Pete B.
1 hour ago
There is really not much need to enumerate your ailments.
– Pete B.
1 hour ago
add a comment |Â
1 Answer
1
active
oldest
votes
up vote
3
down vote
Anytime you take money from a 401K, that is not a Roth, you will have to pay taxes on that money. So the answer is yes, you will have to pay taxes. However, what you need to worry about is if you owe a penalty on the money withdrawn. Were you under the age of 59 1/2? If so, you may owe a 10% penalty.
When did you take the money out? If it is before May 2018, then I think you will owe the penalty as well. If after, you need to file IRS Form 5329 and that should include proof from your doctor, to ask for the exemption from the penalty. Note: none of this paragraph applies if you are over 59 1/2.
Now owing tax on the amount withdrawn should not make you panic. After all, your income is probably much lower this year (since you only worked part of the year), and in the end you may be exempt from taxes. Heck you may even get a sizable refund due to the earned income credit (depending on your situation).
This is a scary and frustrating time. Just work though this the best you can.
answered 1 hour ago
Pete B.
46.8k1098147
add a comment |Â
1 Answer
1
active
oldest
votes
1 Answer
1
active
oldest
votes
active
oldest
votes
active
oldest
votes
up vote
3
down vote
Anytime you take money from a 401K, that is not a Roth, you will have to pay taxes on that money. So the answer is yes, you will have to pay taxes. However, what you need to worry about is if you owe a penalty on the money withdrawn. Were you under the age of 59 1/2? If so, you may owe a 10% penalty.
When did you take the money out? If it is before May 2018, then I think you will owe the penalty as well. If after, you need to file IRS Form 5329 and that should include proof from your doctor, to ask for the exemption from the penalty. Note: none of this paragraph applies if you are over 59 1/2.
Now owing tax on the amount withdrawn should not make you panic. After all, your income is probably much lower this year (since you only worked part of the year), and in the end you may be exempt from taxes. Heck you may even get a sizable refund due to the earned income credit (depending on your situation).
This is a scary and frustrating time. Just work though this the best you can.
answered 1 hour ago
Pete B.
46.8k1098147
add a comment |Â
up vote
3
down vote
Anytime you take money from a 401K, that is not a Roth, you will have to pay taxes on that money. So the answer is yes, you will have to pay taxes. However, what you need to worry about is if you owe a penalty on the money withdrawn. Were you under the age of 59 1/2? If so, you may owe a 10% penalty.
When did you take the money out? If it is before May 2018, then I think you will owe the penalty as well. If after, you need to file IRS Form 5329 and that should include proof from your doctor, to ask for the exemption from the penalty. Note: none of this paragraph applies if you are over 59 1/2.
Now owing tax on the amount withdrawn should not make you panic. After all, your income is probably much lower this year (since you only worked part of the year), and in the end you may be exempt from taxes. Heck you may even get a sizable refund due to the earned income credit (depending on your situation).
This is a scary and frustrating time. Just work though this the best you can.
answered 1 hour ago
Pete B.
46.8k1098147
add a comment |Â
up vote
3
down vote
up vote
3
down vote
Anytime you take money from a 401K, that is not a Roth, you will have to pay taxes on that money. So the answer is yes, you will have to pay taxes. However, what you need to worry about is if you owe a penalty on the money withdrawn. Were you under the age of 59 1/2? If so, you may owe a 10% penalty.
When did you take the money out? If it is before May 2018, then I think you will owe the penalty as well. If after, you need to file IRS Form 5329 and that should include proof from your doctor, to ask for the exemption from the penalty. Note: none of this paragraph applies if you are over 59 1/2.
Now owing tax on the amount withdrawn should not make you panic. After all, your income is probably much lower this year (since you only worked part of the year), and in the end you may be exempt from taxes. Heck you may even get a sizable refund due to the earned income credit (depending on your situation).
This is a scary and frustrating time. Just work though this the best you can.
answered 1 hour ago
Pete B.
46.8k1098147
Anytime you take money from a 401K, that is not a Roth, you will have to pay taxes on that money. So the answer is yes, you will have to pay taxes. However, what you need to worry about is if you owe a penalty on the money withdrawn. Were you under the age of 59 1/2? If so, you may owe a 10% penalty.
When did you take the money out? If it is before May 2018, then I think you will owe the penalty as well. If after, you need to file IRS Form 5329 and that should include proof from your doctor, to ask for the exemption from the penalty. Note: none of this paragraph applies if you are over 59 1/2.
Now owing tax on the amount withdrawn should not make you panic. After all, your income is probably much lower this year (since you only worked part of the year), and in the end you may be exempt from taxes. Heck you may even get a sizable refund due to the earned income credit (depending on your situation).
This is a scary and frustrating time. Just work though this the best you can.
answered 1 hour ago
Pete B.
46.8k1098147
answered 1 hour ago
Pete B.
46.8k1098147
answered 1 hour ago
Pete B.
46.8k1098147
answered 1 hour ago
Pete B.
46.8k1098147
46.8k1098147
add a comment |Â
add a comment |Â
Wolfiebonbon is a new contributor. Be nice, and check out our Code of Conduct.
Wolfiebonbon is a new contributor. Be nice, and check out our Code of Conduct.
Wolfiebonbon is a new contributor. Be nice, and check out our Code of Conduct.
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Also have severe arthritis both hands bone at base of right thumb removed because of it. If I stand up for 30 minutes or more knees ache get stiff. If I sit for more than 20 minutes both hips especially right hip start to ache. Wakes me at night. Employer doesn’t seem to want to find alternative suitable employment. If I retire this year and apply for SSD will i pay tax on withdrawal from 401k used to pay medical/household bills? Lose about $ 500 a month on workers comp am barely getting by
– Wolfiebonbon
1 hour ago
4
There is really not much need to enumerate your ailments.
– Pete B.
1 hour ago