If you are younger than 59 1/2, you will pay a 10% early withdrawal penalty plus your ordinary income tax on the money you take out of a 401k. There is no exclusion from the penalty for using money from a 401k to purchase a home. That exclusion of the early withdrawal penalty is allowed if you have a traditional IRA.
You will get a 1099R from the custodian of the account, which you will enter on your tax return. The software will use all of your income and all of the tax withheld to reconcile whether you get a refund or owe tax due.
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