Quote:
Originally Posted by stevepaa
The dividend is rolled over into the fund. I have not taken any money directly.
But I have declared it each year, so I presumed when I do take a distribution, that whatever amount I have declared previously would be exempt from taxes at the time of withdrawal.
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I wouldn't presume anything at this point. As was mentioned, you need tax help. This is a big mistake and you should cover your butt and find out what other errors you might be making. I've never heard of anyone paying taxes on their reinvested IRA account and even the CPA I work with has no clue how you will handle this. He said if you don't pay the taxes when you take the money out the IRS will be all over you.
If you aren't taking the money out of the 401k then you shouldn't be paying any taxes on it. That is the advantage of having retirement accounts. In other words, you have been paying taxes on a tax deferred account. Our CPA suggests you need to go back and refile for all those years otherwise you are in for a nightmare once you do start taking it out.