[Sherri Counts]

I was laid off my job of sixteen years. I had to cash in my 401k to be able to make it. How would I claim it on my taxes. I did collect unemployment, but it was half of my pay before.

[ebaines]

You will receive a 1099-R form from the 401(k) plan administrator detailing the amount you withdrew from the plan. This is taxable income which you report on line 16 of your Form 1040 tax return ("Pensions and Annuities"). And if you were separated from service under age 55 or were under age 59-1/2 in 2013, and if you don't qualify for an exception to the early withdrawal penalty, you must include 10% of the amount on line 58 of Form 1040 for the penalty ("Additional tax on IRAs, other qualified retuirement plans, etc.").

[ScottGem]

Just to make this clear, you don't "claim" it on your taxes, you report it as income. The 1099-R should also list any amounts withheld from your distribution. Those amounts would be entered along with any amounts withheld from your salary.

You should also get a 1099 from your state for the unemployment paid to you. That also will be entered as income on your return. And, if you had any amounts withheld for taxes, those also will be entered as taxes paid.

If you did not have amounts withheld from either unemployment or your distribution, then its possible you will have to pay a significant amount in taxes this by April 15.

[ebaines]

Good points Scott. I would also add that depending where you live there may be state or local income tax implications, though no additional penalties.