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susanknight15
Level 2
February 7, 2022
Question

My employer sold the business and I cashed out my 401k. I already paid 25% federal. Do I owe another 10% penalty ?

  • February 7, 2022
  • 1 reply
  • 1 view
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1 reply

LeonardS
LeonardS
Level 14
February 7, 2022

Yes, you will be subject to a 10% penalty  if you are under the age of 59½, and cashed out your 401(k).  The 25% withholding already withheld will be used to offset your total tax due. 

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    S
    susanknight15Author
    Level 2
    February 8, 2022

    Thank you Leonard. 

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