Re: 401k
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New Member

401k

Making a withdrawal from the 401k as a down payment will I be taxed on the amount I withdraw 

3 Replies
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Level 15

401k

Yes.  A 401K withdrawal is 100% taxable unless it's in a ROTH 401K.  And there is a 10% Early Withdrawal Penalty if you are under 59 1/2.  But the penalty might be suspended for 2020 due to the Covid-19.  Can you take a loan from it instead of a withdrawal?  You don't report loans.

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New Member

401k

My husband is 62,  has a rollover 401k, will make a withdrawal of 60,000 in California. Does he take taxes right off the top or when we file next year

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Level 15

401k

They will take out tax withholding on the withdrawal.  That's just like withholding from your paychecks.  You will get a 1099R at the end of the year to enter into your tax return with your other income to figure out the total tax (and it may put you into a higher tax bracket) and then the withholding is subtracted from the total tax to figure your refund or tax due. 

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