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Wallstreet Esq.
Wallstreet Esq., Tax Attorney
Category: Tax
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Experience:  10 years experience
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Recently withdrew $70,000 from my 401K, receiving $56,450

Customer Question

Recently withdrew $70,000 from my 401K, receiving $56,450 after taxes. The reason was to add an addition to my home. My question is since Federal tax was already deducted, what happens when I file taxes next year with the IRS? Will I be taxed again on the 401K distribution, along with my retirement income. I was 71 1/2 at the time of the transaction.
Helene
Submitted: 3 months ago.
Category: Tax
Expert:  Rick Martin replied 3 months ago.

Hi, I'm happy to help. Please give me a moment to develop my answer.

Expert:  Rick Martin replied 3 months ago.

You may receive an offer from Just Answer for a phone call. If you feel a phone call with me is needed, please let me know and one will be arranged. I'm typing your answer now.

Expert:  Rick Martin replied 3 months ago.

When you file your taxes next year with the IRS, you will report what was withheld as tax previously paid on the distribution (70,000-56,450). You will not be taxed again. However, the amount withheld is an estimate. The actual tax tax may be higher or lower depending on your tax situation. The amount they withheld of 13,350 is an estimate to be applied against the actual tax you owe.

Expert:  Rick Martin replied 3 months ago.

Does that seem clear?

Expert:  Rick Martin replied 3 months ago.

I'm available to answer any follow up questions you may have. Thank you for this opportunity to serve you. I kindly ask that you give me a good rating if you are happy with my service. My 5 star rating is very important tome. Have a good day. -Rick