I withdrew my 401k earlier this yr to pay off all my debt since I was in between jobs. I had two withdrawals on which, instead of paying 20%, I voluntarily paid 30%. Will this make much of a difference when I have to do my taxes for this yr regarding the penalty I pay? I am single, and income of around $40,000/yr gross.

Does your $40K "gross" income include the withdrawal from your 401(k)? If so, and your total income is $40K, then the 30% you had withheld is probably more than you needed. $40K income puts you in the 15% bracket (assuming you are married filing jointly), plus 10% penalty gets you to 25% total. So you may get a bit of a refund. But don't forget if you live in state with income tax you will have to pay them as well.

ebaines:

He stated that he was single, so his marginal tax rate is 25%, so I suspect that he may have to pay something come tax time.

Thoma09:

A breakout of how much of the $40K is 401K distribution and how much is salary will help us give you an estimate on your tax liability.

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Originally Posted by AtlantaTaxExpert

ebaines:

He stated that he was single, so his marginal tax rate is 25%, so I suspect that he may have to pay something come tax time.

Thoma09:

A breakout of how much of the $40K is 401K distribution and how much is salary will help us give you an estimate on your tax liability.

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OK, add the distribution and my gross would be around $58k

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Originally Posted by AtlantaTaxExpert

ebaines:

He stated that he was single...

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Yep - missed that - thanks!

Thoma09:

Your federal tax liability is about $8,650 and the 10% Early Withdrawal Penalty is $4,000, for a total of $12,650.