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Posts tagged "IRS"

Substantiating 401(K) Hardship Distributions - What Do I Have To Prove?

Many 401(k) plans provide that an employee participant can receive a distribution of his or her elective deferrals from the plan on account of a financial hardship. A hardship distribution is only permitted if the employee experiences an immediate and heavy financial need and the distribution is required to satisfy that need. An immediate and heavy financial is defined by the IRS as one or more of the following with respect to the employee or the employee's immediate family:(i) medical expenses; (ii) purchase of a principal residence (employee only); (iii) tuition and related educational expenses; (iv) payment necessary to prevent an eviction or foreclosure of a principal residence; (v) burial expenses; and (vi) repair expenses for damage to the employee's principal residence.

Don't Forget the IRS In Simple Estates

Don't forget the IRS. It sounds like a silly platitude. The IRS always gets theirs, doesn't it? But in a decedent's estate it is essential that someone (a personal representative) file a final tax return for the decedent. Again, this seems simple, but not always. Let's say Grandpa Bill, who was working up until his death, died March 15, 2014. Let's say all of his financial assets were jointly owned with daughter. Since Grandpa died before April 15 he hadn't yet filed his 2013 return AND he had income in 2014 for which another return has to be filed.

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