If I report my 401K distribution, will I have to pay taxes on 401K distribution income again if taxes were withheld from my distribution?
Regarding taxes on 401K distribution funds, your Form 1099-R will show taxes withheld from the distribution -- Usually 20%. Depending on your tax bracket, the amount withheld might not be enough to cover the tax on the distribution. In that case, you'll have to pay more tax. However, if you’ve already had taxes withheld, you won’t be subject to double taxes on 401K distribution funds.
If the tax withheld is more than you owe, you'll get a refund or a credit of taxes on 401K distribution funds against other taxes owed.
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So how much will you get (or owe) this year? That’s the million-dollar question. We happen to have three very useful calculators to help you estimate your refund or balance due.