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

    Dec 31, 2007, 10:51 AM
    Besides the annuity penalty does the IRS add penalty for removing money
    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's Avatar
    ebaines Posts: 12,131, Reputation: 1307
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    #2

    Jan 3, 2008, 02:58 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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