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See what's trending for the November 15th deadline (Form 990) and resources for the upcoming tax season. View ProConnect Hot Topics.
See what's trending for the November 15th deadline (Form 990) and resources for the upcoming tax season. View ProConnect Hot Topics.
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- 401k distribution taxable to the State (Ohio)
401k distribution taxable to the State (Ohio)
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PauerHaus1
Level 1
05-17-2022
06:51 PM
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Taxpayer took out $450k from his 401k to purchase a house in Nevada. Problem is that he still lived in Ohio when he took the distribution and deposited the funds in his bank account in Ohio. (About 2 months before he moved to Nevada). Taxes due for Ohio plus City plus School District are substantial. Are we stuck or anybody any suggestion how to avoid paying the State and City tax. All of the distribution of the 401k was used to buy the house in NV. Would there be any exception reporting the income to the state in a case like this. Better planning would have avoided all this of course, but here we are.
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George4Tacks
Level 15
05-18-2022
06:38 PM
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"Better planning would have avoided all this of course, but here we are." That is your answer. Clients often do things without consulting. Pension is taxable to the state in which they live at the time of the distribution. They could have taken a 401K loan and then paid that off when they were in Nevada, but as the saying goes "Hindsight is 20/20"
Answers are easy. Questions are hard!
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George4Tacks
Level 15
05-18-2022
06:38 PM
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"Better planning would have avoided all this of course, but here we are." That is your answer. Clients often do things without consulting. Pension is taxable to the state in which they live at the time of the distribution. They could have taken a 401K loan and then paid that off when they were in Nevada, but as the saying goes "Hindsight is 20/20"
Answers are easy. Questions are hard!
