My former employer just sent me a letter informing me that I contributed too much to my 401(K) in fiscal 2006 - not more than the IRS limit of $14K, just more than the percentage of income that their plan allows. I have already rolled this money over to an IRA. In the letter they say I have to withdraw that money from the IRA (it won't be subject to pre-mature distribution penalty) and then pay tax on that sum for fiscal 2006. They say I will be sent a 1099-R in January 2008 which I must file with my fiscal 2007 tax return, however the income is taxable in fiscal 2006. Two questions:
1) Can I file my taxes without including this additional income, then later file an amended return when I get the
1099-R next January? This way I can delay paying the tax for a year, but is it legal?
2) If I choose to pay the tax on the excess distribution along with my 2006 tax return I will end up owing approximately $1000 in taxes. Will I then have to pay an IRS penalty for not paying quarterly estimated tax? Thanks for the help.
>
>
>
>
>
>
>
>
>