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Recovering withheld earnings


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A plan account was apparently mis-coded by the brokerage firm and they withheld taxes on some earnings. (Not my plan; just trying to help out an accountant.)

Does anyone know how to get that back?

I suggested to the accountant that they file a trust return - Form 1041 - and show $0 tax due and $x withheld and they should get a refund, just like any other overwithheld tax. Any thoughts?

Ed Snyder

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I suggested to the accountant that they file a trust return - Form 1041 - and show $0 tax due and $x withheld and they should get a refund, just like any other overwithheld tax. Any thoughts?

That appears to be all you can do since it crossed a tax year. "In some instance", when these things are done within a year, you can offset the amount against additional funds being submitted to the IRS. This becomes more difficult after the year end reports were balanced and filed with the IRS; leaving your suggestion the only 'apparent' reasonable approach.

Good Luck!

CPC, QPA, QKA, TGPC, ERPA

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