besides the annuity penalty does the IRS add an additional penalty for removing money

truckercarla · #1 Dec 31, 2007, 08:51 AM

I am removimg money from my 401k plan & the annuity is assessing me a 8% penalty. Is the IRS going to penalize me as well or is it just categorized as ordinary income?

ebaines · Jan 3, 2008, 12:58 PM

Depends on your age - are you over 59-1/2? If so, then you pay ordinary income traxes on the withdrawal. If you are under 59-1/2, you will also have to pay Uncle Sam a 10% penalty for early withdrawal.



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