How does taking money from my retirement affect my taxes?

Forum|Forum|1 year ago
January 13, 2025
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I am considering taking out money from my retirement early, but I am unsure of how this will affect or penalize me at the end of the year when I go to file my taxes.

xmasbaby0

Employee

If you are younger than 59 1/2 there is a 10% early withdrawal penalty for taking the money out. And there will always be ordinary income tax --at whatever tax bracket you are in. In January you get a 1099R for the distribution from the retirement account and must enter it on your tax return. Usually when you take money out of a retirement account you can have some tax withheld -- just like you have withheld from your paychecks. If you do that, you will be entering the amount that was withheld when you enter the 1099R.

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**