The return of 2009 withdrawals must be made by Nov. 30. (And even if you receive a scheduled monthly withdrawal in December, you'll have 60 days to return that to your IRA without consequences.)
Mark Luscombe of CCH, the tax analysts, explains how these transactions would be reported on your tax return:
"For reporting the rollover from a 401(k) plan, the distribution would be reported on Form 1040 Line 16a (assuming that the line numbering does not change before the 2009 Form 1040 is finalized), and the rollover would be deducted from the amount, if any, reported on Line 16b, with the word explanation 'Rollover' inserted on Line 16b.
"Similarly, for reporting a rollover from an IRA to another IRA, the distribution would be reported on Form 1040 Line 15a, and the rollover amount deducted, and the balance, if any, reported on Line 15b, with the word 'Rollover' inserted on Line 15b."
I'm including that specific information in this column because you know you'll be asking next April when it's time to file your taxes! So please clip this column for future reference.
What if you need those withdrawals?
Of course, this information is good news only for those who don't need those annual withdrawals because they have enough other savings or income to live on each year. There are many seniors who are forced to withdraw to supplement their income.
Keep in mind that anyone over age 59-and-a-half always can take any amount out of a retirement account without penalty -- but subject to ordinary income taxes. That's never advised because the goal always has been tax-deferred growth of assets until retirement, when it was assumed you'd be in a lower tax bracket.
With the latest rumblings of increased tax rates, that might not be a safe assumption. But if you're one of the fortunate ones who does not need to withdraw from your retirement plan this year, you won't be forced to do so. That's likely to be the best tax break you get this year. And that's The Savage Truth.