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    Heavy_Mental's Avatar
    Heavy_Mental Posts: 1, Reputation: 1
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    #1

    Feb 24, 2008, 08:12 AM
    How to pay back early withdrawal penalties
    Last year I had to to cash out on a 401k and a rollover IRA due to being laid off and earning less than half the salary than the previous year. I was wondering how am I supposed to pay the early withdrawal fee? Is it something that automatically gets taken out when I withdraw or do I have to pay it back myself?
    ebaines's Avatar
    ebaines Posts: 12,131, Reputation: 1307
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    #2

    Feb 25, 2008, 10:15 AM
    The early withdrawal fee is not automatically withheld. The administrators of your 401(k) ad IRA should have each sent you a 1099-R form. You report the full amount of the withdrawals as reported on your 1099-R on line 16 of your form 1040 ("pensions and annuities"), the tax they already withheld on line 64 ("Federal income tax withheld from forms W-2 and 1099), and you show the 10% penalty that is due on line 60 ("additional tax on IRAs, other qualified plans, etc").
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