September 4th, 2009 4:56 PM by Ron Mastrodonato
Can't avoid tax on early 401(k) pay
Dear Dr. Don,I recently had to take $4,800 from my 401(k) retirement account. It was a hardship withdrawal. I paid 10 percent tax on it right away. I understand that I could be taxed an additional 10 percent for an early withdrawal made before age 59½. I am hoping that I won't have to pay income taxes when it comes time.
I make $43,000 annually for my full-time job. I do independent contract work that amounts to about $5,100 annually and have a part-time job that pays about $1,100 annually. I am single, so I claim no one on my taxes. I'm not sure if you can tell me anything. I am trying to prepare if I do have to pay taxes on the withdrawal. -- DL Taxes