Retirement tax questions

Your question really makes no sense.  You will owe federal income tax plus a 10% penalty on the 401K withdrawal.

Any deduction will reduce your income tax, but that requires putting more money someplace you can't touch it than you get as a benefit.  For example, if you donate $1000 to charity, you will save $250 in taxes, but that means that another $750 has gone out of your pocket never to be seen again.

If you have (let's say) up to $5000 that you could put in your spouse's IRA, it would be far smarter to put that $5000 directly toward the house and withdraw less from your 401(k) -- or put it back in the 401(k) if it is within 60 days.

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