Monday, February 2, 2009

IRS Sec. 401k(a)(31) or How the IRS Gave Me a Heart Attack

Monty Python-The Audit

I am so bad about getting my mail. I let it pile up down at the box for days and days and then it may marinade in my car for a few days before it makes it into the house where it will sit for a few days on the kitchen counter and then eventually I open it. Unless it's a check. I am not that stupid. Anyway, I finally got to the point of actually looking at the mail, throwing away the junk mail and the mail for the previous tenants, etc. (I have lived here almost 2 years now, you would think their mail would stop coming here.)

There were tax forms from my clients, tax forms from the banks for interest and dividends. (ha, ha). And there was a form 1099r for distribution from a retirement account. Uh, what? I rolled over the account, never took possession. What are you talking about....If it was true, I would be paying taxes and a penalty which would amount to many tens of thousands of dollars. I spent a few hours online trying to figure out where I had gone wrong, how to fix it, how much a large cardboard box would cost. I texted my son-in-law to ask him to have the financial guy I used to roll over my account to call me.

I so wanted to watch the Superbowl yesterday. Wanted those Steelers to kick butt. A friend was having a Superbowl party and I could have made it for half time but all I could think of was the how on earth I would pay the IRS. I would have been a party pooper, so I stayed home.

Now, do you remember my story about my daughter and her car being vandalized and how there had to be a pony in the pile of crap? Well, this story has a happy ending, too. If I had actually bothered to read each box of the 1099r, I would have seen that box 2(a) had taxable income of 0! I don't know about you, but when I see crappy lawyer like chicken scratch like the title of this post, my brain goes into Walter Mitty mode. I start daydreaming, start thinking about other things I would rather do. So, the guy calls me this morning and tells me to stop panicking and that it was not the end of the world as I knew it.

Can you imagine? I got good news on a Monday and about the IRS no less. Now, let me see, I have to file 1099-MISC for my subcontractors, find all my receipts, fill out Schedule C and the self-employment tax form, and then file an extension when my head pops....

Do you think Arnold would take an IOU?


Jeanne said...

Stupid IRS!!! Glad you're not really in trouble...

patrickl said...

Thank you for sharing this information.
Fidelity 401k

Happy Hour...Somewhere said...

How funny. I transferred my money from a Fidelity account to an absolutely asinine account with Prudential, quite possibly the stupidest thing I have done my whole life. The people at Fidelity were fairly rude though, so not sure I would have kept my money there anyway.