Legal Question in Tax Law in Illinois

I took a partial distribution from a 401k and rolled over the rest with a new employer. Later in the year after filing taxes, I received a refund stating that I had been taxed too much. Why when the 20% penalty had been taken? I live in the state of Illinois.


Asked on 1/24/13, 6:38 pm

1 Answer from Attorneys

Virginia Prihoda Law Offices of Virginia Prihoda

You receive a tax refund only when you have prepaid credits (your own money) which exceed the amount of tax due when you file your tax return, when the tax is based on your total taxable income from all sources during the year. Thus, you received a refund because apparently your prepaid credits exceeded the tax on your total income for the year. If you sit down and study your tax return and take a look at the tax tables for the year, you can review how your taxable income was calculated, and how the rate at which the withholdings were taken relates to the rates of tax in the tax tables. Take some time and study this and you'll get your answer. If you had a professional tax preparer for the tax return in question, he or she can help you with this analysis when you bring in your 2012 tax information.

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Answered on 1/25/13, 8:03 am


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