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Question

401k

Forum|Forum|8 years ago
April 5, 2018
1 reply
1 view

taking an early withdrawal from account. they will charge 20%, but what about the 10% by the government? Is that mandatory?

Retirement Accounts

Alumni - Expert

Alumni - Expert

The 20% federal tax withheld is just to help you not incur an underpayment penalty. It functions like the withholding on W-2 income. The 10% under early withdrawal penalty will be calculated on your return (when you enter your 1099-R) and added to your tax liability for the year.

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