Major1096
New Member

How does withdrawing my 401k early impact taxes?

I have a 401k from a previous job that’s just sitting there. I already have another 401k going through my current job. Rather than rolling my old one into a new one, I’m considering withdrawing the funds. My car died this year and I had to get a new one and take out a loan for it. After taxes and the penalty fee, I should have enough to payoff my loan and have several thousand left over to open an Ira account, but fidelity told me I may still have to pay more when I file my taxes, even though they said they’ll withhold and send however much is owed for the taxes and penalty fee when I withdraw it. If I pay the taxes and fee separately how does taking the money out impact filing and potentially mean I owe more when I file?