All About Pensions

4 Responses to “If I Took Out 700.00 Dollars From My 401k, Will That Affect My Tax Return?”

1. Judy on February 3rd, 2010 at 7:38 pm

   You’ll pay tax on your 401K withdrawal, plus a 10% penalty on the withdrawn amount assuming you are under age 59-1/2. So your refund would be smaller by a little under $200.
   Your tax on the $28,700 is $2605 plus the $70 penalty, or $2675. Your refund would be $870.
   A word of advice – don’t use your 401K as a savings account for current expenses – it’s very costly, since you pay a penalty for early withdrawals.

2. craigd25 on February 4th, 2010 at 1:26 am

   it counts as income. Probably wouldn’t effect you much

3. farang on February 4th, 2010 at 6:08 am

   The money you withdrew must be reported as income unless it was a loan.
   You should receive a statement from the company that handles your 401(k).

4. jinengli on February 4th, 2010 at 9:27 am

   The $700 will be considered taxable income to you, and you should receive a form 1099-R from the administrator of your plan. Since it’s income, you will owe tax on this amount, likely at 15%. You may owe a 10% penalty tax on the amount of the withdrawal as well, depending on whether or not you are over age 59 1/2 or meet other conditions.

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