Home mortgage

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I withdrew money from my 401K to pay off my house mortgage. Is there a deduction I can take for this withdraw/payment?

Loretta P

Employee Tax Expert

If you are under 59 1/2 years old, you will pay a 10% early withdrawal penalty unless you qualify for one of the exceptions:

Death, or total and permanent disability
Qualified Domestic Relations Order
Series of substantially equal periodic payments based on life expectancy
Dividend pass through from an ESOP
IRS levy
Unreimbursed medical expenses that are more than a certain amount of your adjusted gross income
Certain distributions to qualified military reservists called to active duty
Separation from Service if age requirement is met

Paying off a mortgage is not an itemized deduction on Schedule A. Any interest paid in the tax year prior to the payoff would still be deductible on Schedule A.

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