Tax Law (Questions About Taxes)/Any Tax owed on 401K?

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Question
MEdusa,w
I think kind of a weird situation, I would greatly appreciate your advice. I worked for an employer from January through April in 2014. At this time I had a one time salary deferral in January of $30 into an employer sponsored 401K. This $30 stayed in this 401K account until the end of 2014 when I received a statement from the plan administrator that the account was in effect closed and the balance was now $0 as the $30 in my account all went to pay administrative expenses charged for the quarter ending 12/31/14. According to the plan administrator, this was not considered a withdraw or distribution but merely the payment of expenses I owed and I do not need to declare this $30 anywhere on my federal or CA state taxes for it isn't considered income or reportable period for tax purposes. I just need verification on this. Thank you.

Answer
really? for $30, you stay up at night?

to figure out if you "owed" the $30 or your employer did, you will need a copy of the summary plan description (SPD) from the company.  In there, it will indicate whether or not they (employer) should have paid the admin costs (is usually the case).  I doubt that the custodian was able to charge you the $30. You can also ask them to prove this is the case (that account holders were liable for admin charges).

if it was an admin fee and properly charged to your account, it is not a distribution and not reportable.

good luck. but i wouldnt worry about it. to be honest

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MEdusa

Expertise

Tax and general business including hospitality related (hotel mgmt degree and experience in industry prior to obtaining ms tax and cpa).

Experience

19 years cpa. ms tax. NOTE: My discussions are only a general information and do not constitute tax advise without entering into a specific agreement and executing an engagement letter; This free chat is nothing more than general information and should not be construed as tax advice nor does my response or replies imply an agreement to provide client specific advice or other guidance for purposes of avoiding IRS tax or penalties and should not be relied upon without your own validation and confirmation of the how the discussion may fit your facts... Not having all the facts and/or not having a direct client relationship prevents me from providing the most accurate replies as possible and I highly suggest using a local CPA to provide you with written advice and guidance. Taking matters into your own hands is much akin to trying to land an airplane without a license. It is easy to FLY a plane, but LANDING is when critical experience is key. In short, caveat emptor; do your homework and don't just rely on free chat board advice anywhere, anytime.

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AICPA, CSCPA (Ct society), National Tax,

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a bunch.

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MS tax and other post graduate coursework

Awards and Honors
variety including Summa Cum Laude

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I don't disclose or kiss and tell

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