Solved: Do i pay additional taxes on a 401k withdrawal that i used to pay my house loan
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Do i pay additional taxes on a 401k withdrawal that i used to pay my house loan

 
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Do i pay additional taxes on a 401k withdrawal that i used to pay my house loan

A withdrawal from a 401(k) account is a taxable event.  The taxable amount of the withdrawal is entered on your tax return as ordinary income and taxed at your current tax rate.  Paying a home mortgage is not an exception to the 10% early withdrawal penalty.  If you were under the age for the early withdrawal penalty exception then the penalty will be assessed on your Form 1040 Line 59 as a tax liability.  Any taxes withheld from the withdrawal will be entered on your tax return as a tax payment (just like from a W-2).

To enter a form 1099-R -

  • Click on Federal Taxes (Personal using Home and Business)
  • Click on Wages and Income (Personal Income using Home and Business)
  • Click on I'll choose what I work on (if shown)
  • Scroll down to Retirement Plans and Social Security
  • On IRA, 401(k), Pension Plan Withdrawals (1099-R), click the start or update button

Or enter 1099-r in the Search box located in the upper right of the program screen.  Click on Jump to 1099-R

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Highlighted
Level 15

Do i pay additional taxes on a 401k withdrawal that i used to pay my house loan

A withdrawal from a 401(k) account is a taxable event.  The taxable amount of the withdrawal is entered on your tax return as ordinary income and taxed at your current tax rate.  Paying a home mortgage is not an exception to the 10% early withdrawal penalty.  If you were under the age for the early withdrawal penalty exception then the penalty will be assessed on your Form 1040 Line 59 as a tax liability.  Any taxes withheld from the withdrawal will be entered on your tax return as a tax payment (just like from a W-2).

To enter a form 1099-R -

  • Click on Federal Taxes (Personal using Home and Business)
  • Click on Wages and Income (Personal Income using Home and Business)
  • Click on I'll choose what I work on (if shown)
  • Scroll down to Retirement Plans and Social Security
  • On IRA, 401(k), Pension Plan Withdrawals (1099-R), click the start or update button

Or enter 1099-r in the Search box located in the upper right of the program screen.  Click on Jump to 1099-R

View solution in original post

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