Early 401k withdrawal

Thedrewman23
Thedrewman23 Member Posts: 1 Newcomer
in General

I withdrew early from my 401k. I have the exact amounts. I'm sure that I'm supposed to pay an additional 10% tax on top of the 20% early withdrawal fee. I just didn't see anywhere to do it on the freetax return . How should I enter that info?

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  • JMSSGV
    JMSSGV Member Posts: 243
    Answer ✓

    There's no "20% early withdrawal fee"; the 20% that was withheld from your distribution is the same as withholding from your wages. It doesn't represent the actual tax liability created by that withdrawal, which depends on the rest of your income.

    Did you receive a Form 1099-R for the distribution and include that amount in income? The code in box 7 of the 1099R should clue the software in that you will have a penalty. You need to complete Form 5329 to calculate and report the penalty amount.

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