@twig0069 don't confuse "tax" with "withholdings".
"Taxes" are only calculated on your tax return, not on your paycheck or your 401k distributions.
"Withholdings" from your 401k distribution or from your paycheck are simply estimates and act as advance payments on what may be due on your tax return. the withholdings prevent you from being 'crushed' by taxes on April 15 and if they were overestimated, result in a refund. (at least that is the way I look at it)
