topic Re: 401k withdraw in Retirement tax questions

401k withdraw

cdabbs21 — Sun, 29 Sep 2019 14:12:23 GMT

I left my job and decided to withdraw my 401k to help with my relocation. I had them withdraw 20% they recommend. My question is that income and taxes just added to my return like regular income and taxes? So will I get a refund if that 20% taken was to much? Or is it calculated different.

Re: 401k withdraw

DoninGA — Sun, 29 Sep 2019 14:33:55 GMT

The taxable amount of the withdrawal is entered on your tax return as ordinary income and taxed at your current tax rate. The federal income taxes withheld are entered on your tax return as a tax payment (just like from a W-2).

If you are were older then 59 1/2 when the withdrawal occurred or the distributions were made to you after you separated from service with your employer and the separation occurred in or after the year you reached age 55 then there will not be an early withdrawal penalty. If you were not age exempt from the early withdrawal penalty then the 10% penalty on the amount withdrawn will be assessed on your federal tax return as a tax liability.

If your total tax payments are greater than your total tax liability then you will receive a tax refund for the overpayment. If the total tax payments are less than your total tax liability then you will have taxes owed.

Re: 401k withdraw

Critter — Sun, 29 Sep 2019 14:36:18 GMT

The entire distribution is added to your income just like your wages and the amount withheld is added to all your other withholding on the tax return ... then the tax is calculated normally ... if you paid in too much you get a refund of the excess withholding ... if you did not pay in enough you will have a balance due. If you are under the age of 59.5 and you have no qualifying exclusions the distribution is subject to a 10% penalty + fed & state taxes ... you may find the 20% was not enough sadly.