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Retirement tax questions
Taking money out of a 401K for a down payment on a house is not an exception to the 10% early withdrawal penalty, so if you are under 59 1/2 you will be paying that 10% early withdrawal penalty and ordinary income tax on the money you took out. Taking money out of a 401k to make a down payment is not the same as taking it out of a traditional IRA. If you take up to $10,000 from an IRA you do not have an early withdrawal penalty, although you do pay income tax on the distribution. That is not the case with taking it from a 401k.
In January/early February you will get a 1099R which must be entered on your tax return.
**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**
‎October 2, 2019
5:14 PM
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