hoover
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Joined: 17 Nov 2005
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| Simple question (I hope) |
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I recently changed jobs, and am in the process of purchesing a new home. I rolled half of my existing 401k over to my new employer's plan and took a disbursement on the other half to put towards a new home (my first home). My problem is this - Merrill Lynch sent two checks to me (one for each half). However, each is made out to Fidelity (new company's 401k servicer). One had no taxes taken out, and one did, so I know which is supposed to be the disbursement. My name is on the check as well as Fidelity's. Should it be possible to deposit this check intot he bank even though Fidelity is listed first? Or do I need to go back through ML for a new check, which could take forever?
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Thu Nov 17, 2005 5:02 pm |
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Andrew
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Location: Texas
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Good question. I think you've got a good chance of getting it deposited, but ultimately it's up to the bank. Give it a shot, you've got just a bank trip to lose.
Good luck with your new home...
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Fri Nov 18, 2005 1:05 am |
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efflandt
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Location: Elgin, IL USA
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Not sure what you can do about the check or whether it will need to be run through Fidelity or re-issued.
But something to be aware of is that they likely withheld 20%, and depending upon your resulting tax rate and 10% penalty, you may end up owing significantly more at tax time. For example if you are in the 25% marginal bracket, you could end up owing another 15% on top of 20% already withheld, plus state tax.
If you owe more than $1000 to IRS when you file your taxes, you may be subject to additional penalty for under withholding (unless you file quarterly tax payment before end of this calendar year).
I revised my W-4 for increased withholding earlier this year to cover partial IRA to Roth IRA conversion this year and next year. But it may be a bit late to do that the remainder of this year to cover your distribution.
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Fri Nov 18, 2005 2:59 am |
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David Briggs
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I had a Roth IRA distributed to me as a withdrawal, and the check was issued in the name of the trustee for my Roth IRA. I endorsed it and deposited it, and my bank didn't blink an eye. I guess from my bank's perspective, the worst that could happen is the trustee's bank rejects it and my bank would then just treat it like any other returned check. But the trustee's bank must see a ton of these come through, and must understand that the IRA beneficiary is an authorized endorser, so they don't bounce it back
~~David
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Fri Nov 18, 2005 2:15 pm |
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