I made an early withdrawal from my 401K at the end of last year. At the time, I paid federal and state taxes but didn’t realize I would ALSO have to pay a penalty when I filed my taxes. Is there any way I could somehow avoid the penalty by returning the money back into the 401K this year before I file my taxes? I have already done the research and I don’t qualify for any of the withdrawal exceptions listed. I realize it’s a long shot but I’m looking at a hefty penalty + taxes already incurred so any advice would be greatly appreciated. Please help.
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Unfortunately you can’t avoid the penalty by returning the distribution.
Sorry. you had 60 days from the date of withdrawal to put it back or put it into another retirement account such as an IRA.
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