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I withdrew some amount from my 401k this year to pay for my…

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Hi. I withdrew some...

Hi. I withdrew some amount from my 401k this year to pay for my living expenses. I don't have any other sources of income as I'm trying to build my own startup. There is no income from the startup yet. I understand I will have to pay taxes as well as a penalty for this, but is there a way to request the IRS for a waiver? I still don't have a source of income, so it's going to be really difficult to make the payments in the next few months. Thanks.

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Submitted: 4 months ago.Category: Tax
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12/2/2017
Tax Professional: Tax.appeal.168, Tax Accountant replied 4 months ago
Tax.appeal.168
Tax.appeal.168, Tax Accountant
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Tax Professional: Tax.appeal.168, Tax Accountant replied 4 months ago

Unfortunately there is not a waiver that you can request. The amount withdrawn will be taxed as ordinary income and if you are younger than the age of 59.5 years old, the 10% early withdrawal penalty will apply. Paying for living expenses does not qualify for an exception to have to pay the 10% early withdrawal penalty. For more information relating to the penalty exceptions, you can refer to the following link.

https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-tax-on-early-distributions

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