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August 21, 2019
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401k withdrawal

  • August 21, 2019
  • 3 replies
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Does anyone know what taxes are due when you withdraw money from your 401k? I know federal taxes are taken out buy is there any other taxes owed?

    Best answer by DoninGA

    Federal and state income taxes only.  Depending on your state and your age the 401(k) withdrawal may be excluded from state income.

    Social Security and Medicare taxes are not withheld from a 401(k) tax deferred retirement plan withdrawal.

    3 replies

    DoninGA
    DoninGAAnswer
    Employee
    August 21, 2019

    Federal and state income taxes only.  Depending on your state and your age the 401(k) withdrawal may be excluded from state income.

    Social Security and Medicare taxes are not withheld from a 401(k) tax deferred retirement plan withdrawal.

    bb62cv41Author
    August 21, 2019

    Thank you.   I'm sweating alittle bit here trying to figure out what I owe.

    VolvoGirl
    Employee
    August 21, 2019

    You didn't actually pay the tax or 10% penalty (you pay a 10% early withdrawal penalty if you are under 59 ½).  You had taxes withheld like from your paycheck. You still have to enter the whole gross original amount (before taxes were withheld) with your other income to figure out the total tax (and it may put you into a higher tax bracket) and then the withholding is subtracted from the total tax to figure your refund or tax due.

     

    It has to break out and show the 10% penalty separately on your return, (Schedule 4 line 59 which goes to 1040 line 14)

    Then you get credit for all the withholding taken out on 1040 line 16.

     

    And by increasing your income you may have lost some credits like the EIC .  You can lose like up to 50% of it for taxes and penalties for federal and state.

     

    And check if you have the right taxable amount showing up.   A 401K is usually 100% taxable.  Check 1040 line 4b.

    bb62cv41Author
    August 23, 2019

    Thanks for the answer,  I don't have to pay the 10% penalty for early withdrawal. They already kept 20% for taxes and I know I owe more. What I really need to know is if I have to pay any other taxes like medical or social security taxes on top of the federal taxes.

    February 3, 2020

    Did my 401k withdraw go threw on my taxes

    VolvoGirl
    Employee
    February 3, 2020

    Did you enter it before you filed?  Check your 1040 lines 4c & 4d.  4d should be the taxable amount which should be the full amount.