what is the tax penalty for withdrawing from 401k

If you withdraw money from your 401(k) before you’re 59 ½, the IRS usually assesses a 10% tax as an early distribution penalty. This means that in addition to paying ordinary income tax on the withdrawn amount, you will have to pay an extra 10% tax. However, there are some exceptions to this penalty, such as withdrawing funds to cover certain hardships or life events. Additionally, if you are over 55 and have left your employer, you may not be subject to the 10% additional tax. Its important to note that early withdrawals from a 401(k) plan typically count as taxable income.