Question

401k Early withdrawal exceptions

Forum|Forum|6 years ago
May 18, 2020
1 reply
0 views

I am currently have a payment plan with the IRS for a large tax bill I had from 2017 - I pulled out money from my 401k to make those payments - can I claim that as a reason for early withdrawal to help lower my tax liability and enter it in the IRS Levy option in Turbo Tax?

DoninGA

Employee

Having taxes owed and being on a payment plan for the taxes owed is Not a Levy by the IRS.

See this IRS website - https://www.irs.gov/businesses/small-businesses-self-employed/what-is-a-levy

A levy is a legal seizure of your property to satisfy a tax debt. Levies are different from liens. A lien is a legal claim against property to secure payment of the tax debt, while a levy actually takes the property to satisfy the tax debt.