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lorinana
New Member

I just want to be sure. I took money out of my 401 for the down payment on my home I bought in 2016. I had to pay the taxes on that amount at that time, which I did. I

to add that on this tax as additional income.  They are not going to tax me again for that money are they?  I already paid taxes on it once.  How do I know that they won't tax me again.  It made a huge difference in my return ($5300.00).  I understand I have to add it as income, but I really don't want to be taxed on it again.  Can you help me understand and feel assured it won't be?
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Coleen3
Intuit Alumni

I just want to be sure. I took money out of my 401 for the down payment on my home I bought in 2016. I had to pay the taxes on that amount at that time, which I did. I

The withholding is an estimate of what the tax might be. There is no way to know for sure until all your income is added together. It is the same thing as your W-2. The tax that was withheld goes toward the payment of all your tax owed. Premature distributions, as well as being taxed, have a 10% penalty. The exception for first home is only for the IRA, not a 401k.

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Coleen3
Intuit Alumni

I just want to be sure. I took money out of my 401 for the down payment on my home I bought in 2016. I had to pay the taxes on that amount at that time, which I did. I

The withholding is an estimate of what the tax might be. There is no way to know for sure until all your income is added together. It is the same thing as your W-2. The tax that was withheld goes toward the payment of all your tax owed. Premature distributions, as well as being taxed, have a 10% penalty. The exception for first home is only for the IRA, not a 401k.

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