I just received a lump sum GE pension payout from the JV with Xerox in 2001. It was taxed at 20%. Will I need to add this again to my normal income tax filing this year or does the 20% cover it? Thanks for any insight would simply like to file on TurboTax as I normally do.
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bzfr, sounds like you already made a decision to take the monthly amount (annuity), but if you havent, be sure to revisit your options before you actually execute the transaction. Did you know that only your spouse can inherit? And if he or she dies, your kids can't inherit? I was a single parent and if I'd taken the annuity and died a year later, all my pension would revert back to Xerox. No way was I going to let that happen, so that scenario helped drive my decision to take the lump sum.
You should get a 1099 and will add to your income including the tax that was withheld. If it is not rolled over and you are not 59 1/2 you will also get hit with a 10% penalty. I talked with my Financial Planner about the lump sum offer and I was better off waiting until I was 60 and taking the monthly amount.
Talk to an expert. Yo may want to roll it over into an IRA. You should know the tax consequences before you make a decision.
The 20% is the federally mandated withholding. That does not mean that you won’t owe the IRS more tax. In addition to the tax, you will owe another 10% penalty if you are less than 59 1/2 at the time of your withdrawal. Finally, you may owe state tax on it as well.
Dks. Was simply trying to skip the extra hassle . Do not care just want to make sure I’m even with all. Advice is appreciated.
This is where you solicit tax planning advise? Suffer the consequences. This forum attracts a special group.
Thank you txt will make sure to plan on extra 10% at least. I’m not near retirement but want to use this to clear student loans and debt and just get be back to even. Appreciate your input.
If it's a pension, you may have a 10% penalty unless you roll it over. Depending on your age.