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June 6, 2019
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My husband cashed out his 401 k and it was taxed when he did it but now we are being taxed again? We have never done this so is this normal

  • June 6, 2019
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Best answer by Hal_Al

You did not "already pay tax". What you paid was only withholding, an estimate of the tax and penalty due. No piece of income is taxed individually. All your income, including pension plan distributions, is added together at tax filing time. The tax is calculated on that total (after adjustments, deductions,  and credits). Then withholding is subtracted to determine if you owe more or get a refund.

1 reply

Hal_Al
Hal_AlAnswer
Employee
June 6, 2019

You did not "already pay tax". What you paid was only withholding, an estimate of the tax and penalty due. No piece of income is taxed individually. All your income, including pension plan distributions, is added together at tax filing time. The tax is calculated on that total (after adjustments, deductions,  and credits). Then withholding is subtracted to determine if you owe more or get a refund.

June 6, 2019
Thank you! That makes more sense.