1. Home
  2. Taxes General Forum
  3. 401(k) early withdrawal penalty calculation

401(k) early withdrawal penalty calculation

Do you know what is the exact amount on which 10% penalty is imposed when you would withdraw money from your 401(k) account? Is it on the absolute amount you have in your

401(k) account? Some background info abt me: I work here in US, but plan to move/settle back overseas after like 3-4 years. Basically I want to know: Can I still make some money after the 10% penalty taking into consideration the money contributed by employer? Here's the calculation I have:

My Contribution (1 yr) : 3917.99 Employer Contribution (1 yr) : 1958.99

Total (1 yr) : 5876.99 Approx 5 % investment gain : 6170.84

Now, if I would like to withdraw this money what all expenses would I have to be ready for So, would the 10% penalty be on 6170.84? On what amount would I have to pay taxes - my + employer contribution?

Thanks a lot in advance!

- Puneet Maini

> > > > > > > > >
Reply to
puneet.maini
Loading thread data ...

Federal and state income taxes + 10% (federal) of the amount withdrawn. A mandatory 20% will be withheld at time of distribution. This is a credit against your federal taxes, and likely WILL NOT be enough to cover your tax liability for the year.

Yes.

The total amount of the withdrawal, which includes your contributions, employer match and earnings.

Reply to
Herb Smith

Yes.

Yes.

I'm assuming you are not a US citizen. Before making any decisions, check to see if there are any tax treaty provisions that would cut you a break on this.

-- Phil Marti Clarksburg, MD

Reply to
Phil Marti

The 10% early withdrawal penalty is applied to the amount of the taxable distribution not the balance in the account. If your account consists of employer matching contributions, your own pre-tax contributions plus any earnings, then any distribution is 100% taxable and subject to the 10% penalty unless you attained age 59 1/2 or meet one of the exceptions.

Reply to
A.G. Kalman

BeanSmart website is not affiliated with any of the manufacturers or service providers discussed here. All logos and trade names are the property of their respective owners.