Do I get a tax refund from an IRA distribution received back in 2005?
March 28, 2009 by Tax Forum
Filed under Questions & Answers, Refunds
justellemJimsaidhello asked:
In 2005, I received a distribution from an IRA. The IRA was my mother’s and she died in 2005. The money was somewhere between 16 and 17,000. I did not file a 2005 tax return. I want to do so asap and am curious as to whether or not I should expect any kind of a refund from this money??? Thanks very much!
In 2005, I received a distribution from an IRA. The IRA was my mother’s and she died in 2005. The money was somewhere between 16 and 17,000. I did not file a 2005 tax return. I want to do so asap and am curious as to whether or not I should expect any kind of a refund from this money??? Thanks very much!
ninasgramma on Mon, 30th Mar 2009 11:25 am
You are required to file a tax return for 2005. I assume this IRA was a traditional IRA for which the contributions were deductible.
In this case, the full distribution is taxable income to you. You should have received a 1099R from the trustee for the IRA. Get a copy of it from the trustee if you no longer have it. Usually there is federal withholding on the distribution, most often 20%.
If your tax bracket is less than 20%, you will get a refund of some of the withholding. If the distribution was all of your income, and 20% was withheld, you will get a refund.
effin chrisTY on Thu, 2nd Apr 2009 9:29 am
Unfortunately, you don’t receive a refund for taking a distribution from an IRA. What happens is you are subject to PAYING taxes on the distribution because funds in an IRA are in a tax deferred status until they are removed.
If you didn’t elect to withhold the taxes at the time you did your beneficiary distribution, then you were obligated to report and pay it when you filed your taxes for that year. The bank is also required to report this transaction to the IRS, which I am sure they did.
In your case, I would seek tax advice. Being that the IRS is normally two years behind, you may be subject to an audit in the next year or two.
RONALD E B on Sat, 4th Apr 2009 4:51 pm
You must file a 2005 tax return. If no tax was withheld from the distribution, you will owe tax plus interest and penalties.
Scott0000 on Sat, 4th Apr 2009 6:02 pm
A return? No, definitely not. You should consult an accountant to help you file your 2005 return though, as it will be relatively complicated and you will probably OWE money on the IRA distribution.
bostonianinmo on Tue, 7th Apr 2009 6:48 am
You’re required to file a return for 2005 with that much income. You are required to PAY tax on that money. No idea where you get the idea that you’re entitled to a refund! IRAs pass to you without tax through probate but as soon as you withdraw the funds it’s taxable to you since it was not taxed when the money went in to the account.
Pojo on Thu, 9th Apr 2009 9:44 am
Does anyone bother to read the other posts that were almost identical to theirs or do you respond JUST to run up your point count?
I can understand those within a few minutes of each other but 20 minutes later.
Judy on Thu, 9th Apr 2009 6:48 pm
You are required to file a return. Whether you get a refund or not depends on whether more tax was withheld from you total, including from the IRA distribution, than you owe for that year – if so, the extra would be refunded to you.