So I accidentally took out a hardship withdrawal through my 401(k). The app was super confusing. I ended up withdrawing money out of the adoption option. It wasn’t that much money either. It was just like 1500 long story short I called my 401(k) company and they basically said I was in a clear because they didn’t require any paperwork or proof of any of it that I would only have to contact whoever I file my taxes with and just need to make an amendment. Any tax professionals who can give me more ease and reassurance that I will not go to prison or something lol
Thanks for your time in advance
401(k) accidental withdrawal under adoption
byu/Level_Reputation4099 intax
Posted by Level_Reputation4099
2 Comments
Your 401k company should have given you a 1099-R documenting the 401k distribution, and I’m assuming that’s why they told you to amend your taxes, because the distribution will need to be added and you’ll owe income tax and the 10% early withdrawal penalty on the $1500 distribution. You will not go to prison for inadvertently leaving income off your tax return, it happens all the time. You should, however, amend as soon as you get a chance because if the additional income causes you to owe more (or have to pay back part of a refund if you got a refund), interest and penalties are going to start to accrue on that extra amount owed from April 15th onward.
You can always take money out of your 401k as long as the plan allows it which yours did. It will be counted as income and if you are under 59 1/2 you will incur a 10% penalty. But you don’t have to worry about the police battering in the front door.