24hourcampfire.com
Previous Thread
Next Thread
Print Thread
Hop To
sons retirement check from minimum wage job - question #14751516 04/06/20
Joined: Jan 2010
Posts: 15,213
KFWA Offline OP
Campfire Kahuna
OP Offline
Campfire Kahuna
Joined: Jan 2010
Posts: 15,213
my son quit a job a year ago, got a check in the mail from Fidelity for a few hundred dollars. I know if he cashes it and doesn't put it into something he'll have to pay like 60% tax on it

he doesn't have a retirement plan at his existing job so what are his options.

I think if you open a roth you have to have like a minimum $2500 is that right?- anyt other options that he can roll this money over into?


[Linked Image from i.imgur.com]
BP-B2

Re: sons retirement check from minimum wage job - question [Re: KFWA] #14751557 04/06/20
Joined: Jan 2018
Posts: 1,916
Lennie Offline
Campfire Ranger
Offline
Campfire Ranger
Joined: Jan 2018
Posts: 1,916
If he has to file a return, he has to report it for the tax year he received it. IE, if he received check in 2020, it will be reported in next years return. If he goes into his bank and rolls it into another qualified retirement account, he will not have to pay taxes. IF he cashes the check, depending on income level, he may or may not have a tax liability. Fidelity will have reported the distribution to the IRS.


NRA life member
NRA rifle and shotgun trainer
Re: sons retirement check from minimum wage job - question [Re: KFWA] #14751588 04/06/20
Joined: Jun 2019
Posts: 2,786
H
Hotrod_Lincoln Online Content
Campfire Guide
Online Content
Campfire Guide
H
Joined: Jun 2019
Posts: 2,786
An elderly accountant I knew back in the 1960's gave me some very good advice. He told me to report every dime I made, regardless of the source, and then take every deduction I could dream up to avoid paying any more tax than necessary. To quote him exactly- - - - -"An improper deduction might get you a fine or a penalty to pay. Unreported income can be a felony, with some jail time attached!" Good counsel!
Jerry


Ignorance can be fixed. Stupid is forever!
Re: sons retirement check from minimum wage job - question [Re: KFWA] #14751598 04/06/20
Joined: Mar 2007
Posts: 1,292
4
405wcf Offline
Campfire Regular
Offline
Campfire Regular
4
Joined: Mar 2007
Posts: 1,292
He can roll it into an IRA. Due to the modest amount he may not have enough for a fund company, but a bank or credit union may be able to help. He has 60 days to complete this.

If it was from a 401k or a SEP (non-ROTH) and he accepts the money, he will add the amount to his taxable income for the year (thus be taxed at his marginal rate) plus the federal government will charge him an additional 10% penalty. If the money came from a SIMPLE he could possibly pay taxes plus a 25% penalty.

405wcf

Re: sons retirement check from minimum wage job - question [Re: KFWA] #14751608 04/06/20
Joined: Nov 2011
Posts: 23,577
antelope_sniper Online Content
Campfire Kahuna
Online Content
Campfire Kahuna
Joined: Nov 2011
Posts: 23,577
Presuming it's from something like a 401k, he has 60 days to deposit into an IRA.

Since the check was mailed to him, Fidelity probably withheld taxes, so he'll also need to gross up the check for anything withheld, or he'll be taxes on that as well.

Tax rate is ordinary income plus a 10% penalty.


Nobody spends somebody else�s money as carefully as he spends his own.
The U.S Government has a unique capacity for getting things upside down.
Milton Friedman.

Go quiet or full tilt, just don't get caught in the middle of the stupids. DD
IC-A

Re: sons retirement check from minimum wage job - question [Re: KFWA] #14751646 04/06/20
Joined: Apr 2017
Posts: 10,874
FatCity67 Offline
Campfire 'Bwana
Offline
Campfire 'Bwana
Joined: Apr 2017
Posts: 10,874
Vanguard money market IRA for now, like yesterday. Then get to studying.


Maybe we're all happy.
Re: sons retirement check from minimum wage job - question [Re: KFWA] #14751848 04/06/20
Joined: Jan 2010
Posts: 15,213
KFWA Offline OP
Campfire Kahuna
OP Offline
Campfire Kahuna
Joined: Jan 2010
Posts: 15,213
good stuff
thanks guys


[Linked Image from i.imgur.com]
Re: sons retirement check from minimum wage job - question [Re: KFWA] #14751859 04/06/20
Joined: Apr 2011
Posts: 41,510
hanco Offline
Campfire Oracle
Offline
Campfire Oracle
Joined: Apr 2011
Posts: 41,510
The greatest investment is pussy. I wish I had spent more chasing it.

Re: sons retirement check from minimum wage job - question [Re: KFWA] #14752059 04/06/20
Joined: Aug 2010
Posts: 8,824
A
alwaysoutdoors Online Content
Campfire Outfitter
Online Content
Campfire Outfitter
A
Joined: Aug 2010
Posts: 8,824
Usually the bank you deal with has plenty of retirement options like an IRA .the bank is typically very versed also on the rules for such things. If you cant go that route, contact Vanguard on their website.


TRUMP 2020
Re: sons retirement check from minimum wage job - question [Re: hanco] #14752063 04/06/20
Joined: Aug 2010
Posts: 8,824
A
alwaysoutdoors Online Content
Campfire Outfitter
Online Content
Campfire Outfitter
A
Joined: Aug 2010
Posts: 8,824
Originally Posted by hanco
The greatest investment is pussy. I wish I had spent more chasing it.

Great minds think alike.


TRUMP 2020
IC-B


Moderated by  RickBin, SYSOP 

RR1
Who's Online Now
669 registered members (06hunter59, 1234, 1moredeer, 12344mag, 100grNP, 80 invisible), 2,287 guests, and 625 spiders.
Key: Admin, Global Mod, Mod
RR2/3










Fish & Game Departments | Solunar Tables | Mission Statement | Privacy Policy | Contact Us | DMCA
Hunting | Fishing | Camping | Backpacking | Reloading | Campfire Forums | Gear Shop
Copyright © 2000-2020 24hourcampfire.com, Inc. All Rights Reserved.
 
Powered by UBB.threads™ PHP Forum Software 7.7.3
(Release build 20190728)
PHP: 7.3.18 Page Time: 0.053s Queries: 14 (0.004s) Memory: 0.8116 MB (Peak: 0.9080 MB) Data Comp: Zlib Server Time: 2020-05-29 22:25:28 UTC
Valid HTML 5 and Valid CSS