If I withdraw money from my retirement fund, how will that effect my taxes when I file?

Kerry118 · ‎July 13, 2021

I did it years ago and ended up having to pay in and I don't want that to happen again...but I need to get a car!

macuser_22 · ‎July 13, 2021

What type of retirement fund? 401(k), Traditional IRA, Roth IRA, other?

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**

Kerry118 · ‎July 13, 2021

It's just a 401K

macuser_22 · ‎July 13, 2021

A 401(k) distribution is taxed as ordinary income at whatever your marginal tax rate is depending on other income. If you are under age 59 1/2 then there will be an additional 10% penalty for early distribution. Many 401(k) plans do not allow distributions prior to retirement age.

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**

VolvoGirl · ‎July 13, 2021

If you take a Withdrawal it is taxable on your return and may push you into a higher tax bracket and more income can reduce or eliminate some credits you may qualify for. So be careful. Then there is a 10% Early Withdrawal Penalty if you are under 59 1/2 or under 55 if you left that job. You can lose like up to 50% of it for taxes and penalties for federal and state.

If I withdraw money from my retirement fund, how will that effect my taxes when I file?