topic 401k withdrawal in Retirement tax questions

401k withdrawal

LoopsyDaisy — Wed, 09 Apr 2025 16:18:26 GMT

I need to withdraw money from my 401k and the only option to withdraw is for a new baby/adoption.Can I withdraw even though I have no new baby?.If so will do I have to file this on my taxes ?.Will I get in trouble ?

Re: 401k withdrawal

MinhT1 — Sun, 13 Apr 2025 11:43:05 GMT

No, you will not get in trouble.

You don't need any reason to withdraw from your 401(k) account.

Also see what @Opus 17 has said about how to handle the hardship withdrawal with your employer if you are still employed.

Your withdrawal will be taxable and subject to the 10% early withdrawal penalty if you're aged under 59 1/2 and you do not have any exceptions listed in this TurboTax Help article.

@LoopsyDaisy

Re: 401k withdrawal

xmasbaby0 — Wed, 09 Apr 2025 16:31:33 GMT

If you take money out of a 401k before you are 59 1/2 there is a 10% early withdrawal penalty and ordinary income tax on that money. You will get a 1099R that must be entered on your next tax return. As for how you answer questions with the plan for your reason for the withdrawal----we are not weighing in on that if your 401k plan has rules and will only allow withdrawals for specified purposes.

Re: 401k withdrawal

Opus 17 — Wed, 09 Apr 2025 16:58:11 GMT

If you are still employed by the plan sponsor,

You must ask your employer for a hardship withdrawal. The employer decides what hardships they will permit. If you do not have a permitted hardship and you lie to your employer, your employer could take action against you. If the IRS audits the employer and finds that they are not following the hardship rules correctly, the employer can be severely penalized.

If you are no longer employed by the plan sponsor,

You can withdraw at any time for any reason.

With any withdrawal (hardship or not) you will pay regular income tax. You will also pay a 10% penalty unless you have one of these reasons that qualifies for an exception.

https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-exceptions-to-tax-on-early-distributions

Re: 401k withdrawal

LoopsyDaisy — Wed, 09 Apr 2025 17:11:14 GMT

Even though I did not have a child I still should be good?.Do I have to file a form on my taxes

Re: 401k withdrawal

VolvoGirl — Wed, 09 Apr 2025 17:24:53 GMT

If you take a distribution from your 401K at the end of the year you will get a form 1099R to enter into your tax return. Doesn't matter what you used it for. It will be taxable and a 10% early withdrawal penalty if you are under 59 1/2 unless you have an exception to the penalty.