If you take money out of a 401k before you are 59 1/2 there is a 10% early withdrawal penalty and ordinary income tax on that money. You will get a 1099R that must be entered on your next tax return. As for how you answer questions with the plan for your reason for the withdrawal----we are not weighing in on that if your 401k plan has rules and will only allow withdrawals for specified purposes.
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