Generally they withhold 20% for 401k withdrawals. Was this an early withdrawal, subject to the 10% penalty? If so, then 10% of that withholding on the distribution will go towards the penalty.
It was an early withdrawal and 25% was held. We asked our financial guy to make sure we took out enough to cover all taxes, etc so I was a bit shocked to see this.
Thanks! I am a bit upset that our financial guy did not tell us this. He told us he took out enough to pay everything so we didn't expect this 10%. Guess it is just one of those "nothing we can do about it now" things!
Your guy didn't know your financial situation or tax bracket unless he prepares your returns or you told him ... the 25% is standard if you wanted more you had to ask.
I knew we wouldn’t know the definite tax amount but would be close. I am just upset that he didn’t tell us the amount he gave us didn’t include the pre payment....that seems like a huge thing to forget to tell someone. My husband had told him we are normally around the 20-25%. I would have rather have had that all paid up front rather than be a bit shocked today when my refund went way down. But c’est la vie! I’ll be frustrated for a day or two then move on. LOL. Overall, he has been great at keeping our money safe through all the stock market ups and downs so we are good.
My husband does Turnaround work at refineries which can be unsteady so we decided to pay our house off early so if he is out of work, we wouldn’t have that note to worry about. Guess it’s really a good thing I didn’t do the taxes before I had the whole house generator installed Friday!