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    lepicure22's Avatar
    lepicure22 Posts: 1, Reputation: 1
    New Member
    		  
    #1

    Feb 12, 2009, 07:38 AM
    401k penalty (after or before tax)
    Hello:

    When calculating 401k early withdrawal penalty tax (10%), is it after or before the first 20% federal income tax?

    In other words, if the lump sum is 100k, tax is 20k. Is penalty 10% of 100k (10k), or 10% of 80k (8k)?

    Thanks,

    D
    ScottGem's Avatar
    ScottGem Posts: 64,966, Reputation: 6056
    Computer Expert and Renaissance Man
    		  
    #2

    Feb 12, 2009, 07:43 AM

    The 10% penalty is on the total amount of the withdrawal. The 20% is just withholding against tax liability, just like the withholding from your paycheck.
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