Submitted By: someone
Answered: February 24, 2017 8:00 am

I received a lump-sum distribution from my 401(k) and want to put it into my IRA. Can I do it?

If the distribution was a required minimum distribution, it cannot be rolled over to an IRA (the proceeds can be used to fund an IRA if you are eligible to make an IRA contribution for the year). If the distribution was not an RMD, it can be rolled over within 60 days. The 205 withholding on the distribution is a tax credit on your return that is effectively recouped when you file the return. However, if you want to make a full rollover to the IRA, you’ll have to come up with the 20% that was withheld and add it to the 80% you received.

Tax Glossary


A fixed deduction allowed to every taxpayer, except those who may be claimed as a dependent by another person. Extra exemption deductions are allowed for a spouse on a joint return and for each qualifying dependent. A deduction of $3,400 is allowed for each exemption claimed on 2007 returns, but the deduction is phased out for certain high income individuals.

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