<sbernelli[at]hotmail.com> wrote:

- quote -

It doesn't matter. There is no penalty exception for
hardship withdrawals from a 401(k) Do check out IRS
Publication 590 to see if he meets any of the IRA penalty
exceptions.

--
Phil Marti
Clarksburg, MD

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sbernelli[at]hotmail.com wrote:

- quote -

It appears that you are under some assumption that a hardship
withdrawal from a 401(k) plan would not have been taxed or
subject to the 10% penalty as happens with an early IRA
withdrawal. Hardship withdrawals from a 401(k) are taxed and
if early are subject to the 10% penalty. A hardship withdrawal
is just a method that allows an employee access to the 401(k)
funds at an earlier date than retirement or separation from
employment. An employer may or may not allow this type of
withdrawal.

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

A neighbor of mine is a very sad case. I don't know much
about taxes but I'm trying to help the guy. In 2004, his
only income was from several IRA's which were 401(k)
rollovers. Since he's in his 30's, they were premature
withdrawals. He paid the taxes and the 10% penalty with
prematurely withdrawn IRA funds as well. Am I correct in
suggesting that this is NOT a hardship withdrawal because he
withdrew the money, not from an actual 401(k) but from the
IRA mutual funds in which he transferred the 401(k) money?
He cannot, therefore, file a 1040X to reclaim the penalty,
right? Thanks.

Sara

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >