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

    Apr 5, 2011, 08:40 PM
    401k Withdrawal 10% penalty
    We withdrew money from a 401k and had the 10% penalty withheld at the time of the distribution. I am using tax cut software and indicated the withdrawal amount and the 10% penalty already withheld but it seems to be adding it back into my taxes due. It looks like I am being subjected to the 10% penalty twice. Is there somewhere I can show the 10% penalty already withheld and paid to the government?
    ScottGem's Avatar
    ScottGem Posts: 64,966, Reputation: 6056
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    #2

    Apr 6, 2011, 04:00 AM

    Sorry but you are incorrect. The 10% penalty is never withheld at the time of the withdrawal. What is withheld is a portion, generally 20%, towards your tax liability. So, from your 1099R you add the amount of the withdrawal to your taxable income, then you add the amount withheld towards the taxes paid. The 10% penalty is entered on a separate line.
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