If I wanted to withdraw part of my 401k this feb. 2018, will the amount of distributuion counts on my 2017 income since I haven't filed my tax yet? Thank you in advance.

[bratinella_me]

Or will it be income for 2018? I heard that 20% will be withheld automatically. How about the early withdrawal penalty of 10% is it gonna be due this 2018 or 2019 filing season?  Sorry I have a lot of questions since I'm new to this whole thing. And thank you in advance.

[fanfare]

It is recommended that you do not invade your retirement accounts for any reason, if you are below the age of 59 1/2.

[dmertz · Accepted solution]

A 401(k) distribution made in 2018 will be 2018 income, not 2017 income.

The US tax system is a pay-as-you-go tax system.  Any early-distribution resulting from the distribution immediately becomes part of your tax liability along with the income tax liability.  Failure to have sufficient taxes withheld during the year or to make a sufficient estimated tax payment for the tax quarter in which the distribution is made can result in a tax underpayment penalty for the quarter even if you have no balance due by the time you file your tax return.

See the IRS's Tax Topic 306: https://www.irs.gov/taxtopics/tc306

A minimum of 20% is required by law to be withheld from any distribution from a 401(k) paid to you personally that is eligible for rollover to another retirement plan.  (The mandatory withholding can be sidestepped by doing a direct rollover to an IRA, then taking a distribution from the IRA.  Unlike 401(k)s, IRAs are not subject to mandatory withholding.  But, as mentioned above, delaying the payment of your tax liability until you file can result in underpayment penalties if you don't meet any of the safe-harbors described in Tax Topic 306.)