I opened solo 401k and contributed in Dec 2024. It is still in cash account. I changed my mind about opening the 401k. How can I withdraw without penalty?

I haven't filed tax yet, and would like to pay income tax on it, instead. I just want to avoid the penalty. I am an independent contractor (1099).

856

Expert Alumni

Mar 7, 2025 7:57:40 AM

You can't avoid the penalty. If you are under 59 ½ years old, cashing out your Solo 401k will not only increase your taxable income but also subject you to a 10% early withdrawal penalty.

Level 15

Mar 7, 2025 9:43:07 AM

Unless the contribution was an excess contribution, the contribution is irrevocable.

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I opened solo 401k and contributed in Dec 2024. It is still in cash account. I changed my mind about opening the 401k. How can I withdraw without penalty?