Can a profit share acct. also be known as a 401k or IRA acct? which is it? I took an early withdrawl and had the funds office withhold 20% now I owe 10%?

eustis0131 — Thu, 06 Jun 2019 15:27:05 GMT

The profit sharing contribution is a separate amount that...

DianeW — Thu, 06 Jun 2019 15:27:07 GMT

The profit sharing contribution is a separate amount that is based on discretionary amounts the employer wants to put in the plan for the benefit of all the full time employees. It is allocated based on a percentage of salary and typically it is linked with a 401k plan.

The 20% withholding is required in most cases, but does not cover all of the tax liability for an early distribution. As example, if you are in the 15% tax bracket then there is still another 10% that will be due for the penalty at tax time.

You can find the tax rates for your taxable income at this hyperlink: 2017 Federal Tax Rate Schedules

topic Can a profit share acct. also be known as a 401k or IRA acct? which is it? I took an early withdrawl and had the funds office withhold 20% now I owe 10%? in Retirement tax questions

Can a profit share acct. also be known as a 401k or IRA acct? which is it? I took an early withdrawl and had the funds office withhold 20% now I owe 10%?

The profit sharing contribution is a separate amount that...