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I cashed in my 401K to purchase a home. The money was reinvested. Is the tax rate for that still high?
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When you withdraw from your 401(k) plan to purchase a house, you do not qualify for an exception to the early withdrawal penalty of 10%. The first time home buyer exception applies only for SEP, SIMPLE plans and IRA.You have a high amount of tax due as you have to pay income tax on the amount withdrawn at your tax bracket in addition to the early withdrawal penalty.Please read this IRS document for more information:https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-tax-on-early-distri...
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