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401 K Withdraw Question? |
I am UNDER 59.5 years old. more info: The account lists my 401 k contributions separate from the employer matched funds. Had the portioned I withdrew been from the funds I contributed they would have withheld. However they didn't withhold the portion they matched- is it possible these funds are taxed differently? They should have withheld 20% but your tax and penalty will be more than that. You will be taxed at your marginal rate plus a 10% penalty and if you have state income tax you may have that and a penalty. You have 60 days to roll it into a IRA so roll it all in to avoid major problems. When you get your 1099R at the end of the year. Check the distribution code. There is an explanation of the codes on the back of the form. If the code is "early distribution" then you can expect to pay an 10% penalty to the IRS - in addtion to paying your tax bracket on the income. It is treated sort of like pension income - it's taxed much the same way as wages. |
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