Retirement tax questions

Hope you understood when you took money out of your 401k that you are going to pay a 10% early withdrawal penalty if you are younger than 59 1/2, plus ordinary income tax on the distribution.  Taking money out of a 401k to buy a house is not the same as taking it out of a traditional IRA, with which you can take out up to $10,000 to buy a house without that early withdrawal penalty.  There IS a penalty for a 401k, which makes it a pretty expensive way to make a down payment on a house.

 

You will get a 1099R in late January/early February and you will need to enter it on your tax return.

To enter your retirement income, Go to  Federal> Wages and Income>Retirement Plans and Social Security>IRA  401 k) Pension Plan Withdrawals to enter your 1099R.

**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.**