I just finished my taxes and I want to e-file, but because of a pension rollover taxcut gave me a warning saying I need to send in an explanation of said rollover. Will I be able to do this via e-file or do I need to paper file or something.

  • Is there a form number for the explanation or did the app you were using just say 'explanation' and not define what form the explanation should be in? – Michael Pryor Apr 21 '11 at 18:51

You should not have a problem by filing electronically, IF the pension plan distribution you received was from a pre-tax 401-k type plan, and you rolled all of it into another company's similar pre-tax type pension plan OR rolled it all into a simple IRA within the IRS specified period of time, which I don't recall.

As long as there are no tax implications to the pension plan distribution, you'll just need to make sure and keep your tax forms with a paper copy of your electronic return. The yearly wage statement will indicate that you received a pension plan distribution, and if you had no withholding from it because of the rollover, that will be indicated. Similarly, you'll receive a statement from whomever is now the custodian for your distribution, and that will give you documentation should you ever need to present it to the IRS.

There are many special cases, however, which I do not cover e.g. if you did keep some amount of the distribution, or if some was taxable and some was not, and so on.

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