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    Alan58's Avatar
    Alan58 Posts: 4, Reputation: 1
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    #1

    Jan 6, 2012, 03:29 AM
    401-K Early withdrawal penalty and 10% penalty added to Income as well line 58 Tax?
    Hello! My question is: I added the 10% penalty on line 30 of form 1040 to my adjusted gross income on top of my taxable amount of my withdrawal... Next I added the 10% penalty on line 58 (additional taxes on withdrawal), which was then added to my total tax amount. Is this the correct way to do this? Please Advise. Rgds, Alan
    ebaines's Avatar
    ebaines Posts: 12,132, Reputation: 1307
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    #2

    Jan 6, 2012, 07:08 AM
    Hello Alan. Your plan administrator will send you a 1099-R form that reports the amount of withdrawal and the amount of tax withheld. Make sure you have that form in hand before you file your taxes for 2011.

    You enter the amount of the withdrawal from your 401(k) on line 16 (“Pensions and Annuities”). You report the 10% penalty on line 58 (“Additional tax on IRAs, other qualified retirement plans, etc.”). Finally you include taxes already withheld on line 62 (“Federal income tax withheld from Forms W-2 and 1099”). You do not include anything from your 401(k) withdrawal on line 30 - that line is for penalties from withdrawal from savings accounts, and your 401(k) is NOT a savings account.
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    Alan58 Posts: 4, Reputation: 1
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    #3

    Jan 6, 2012, 08:40 AM
    Thx so much Ebaines... That was a huge help. Yes you are absolutely right line 30 is just for penalty on savings (just read up on that). I totally missed that, glad you pointed that out. My plan administrator just took out the 20% in taxes, so I will pay the 10% when I file my taxes. I should get a refund once I include my exemptions & standard deductions, as my 401K withdrawal was my only income for 2011.
    Rgds, Alan.
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    Alan58 Posts: 4, Reputation: 1
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    #4

    Jan 6, 2012, 09:06 AM
    Ebaines you mentioned: You enter the amount of the withdrawal from your 401(k) on line 16 (“Pensions and Annuities”). I thought I enter this amount on line 15 (under IRA distribution) ? Please clarify, Thx, Alan
    ebaines's Avatar
    ebaines Posts: 12,132, Reputation: 1307
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    #5

    Jan 6, 2012, 09:22 AM
    Line 15 is for IRAs. 401(k) withdrawals go on line 16. See the directions for 1040 lines 16a and b, page 23:
    http://www.irs.gov/pub/irs-pdf/i1040.pdf
    Alan58's Avatar
    Alan58 Posts: 4, Reputation: 1
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    #6

    Jan 6, 2012, 11:16 PM
    Thanks again Ebaines :) I see the light :)

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