What you get, what you owe in April, and what it costs, if you take the money out now.
Covers: cash out 401k, 401k withdrawal, early withdrawal penalty, rule of 55, 10 percent penalty, rollover, lost my job 401k, hardship withdrawal.
Open the Cashing Out a 401(k) tool →Taking money out of a 401(k) before 59½ costs three things, and the check you receive shows only the first. Your plan must withhold 20% for federal tax when it pays you, so the check is 80% of what you asked for.
The whole amount is then income for the year, added on top of your other income, so it is taxed at your own rates, federal and state, which can be more or less than the 20% that was held back. And unless an exception applies, there is an additional 10% tax on it. The difference between what you owe and what was withheld is the bill, or the refund, when you file.
The exceptions are ones you tick, because only you know whether they apply. The most overlooked is leaving your job in or after the year you turn 55 (50 for police, firefighters and other public-safety workers): money taken from that employer's plan owes no additional tax. Others cover the whole amount, or a part of it, such as one emergency withdrawal a year or medical costs; you report them on Form 5329.
If you change your mind, you can roll the money into an IRA or a new plan within 60 days of receiving it and owe nothing, but to roll over all of it you must replace the 20% that was withheld from your own pocket. A direct rollover skips both the withholding and the clock.
The last line shows what the same money would grow to if left alone, at a rate you choose. It is an assumption, not a forecast. This is information about published tax rules applied to the figures you enter, not tax or financial advice; your plan's rollover notice and a tax professional can confirm an exception this checklist does not cover.
Five deductions new for 2026 are not modeled here: tips (§224), overtime (§225), car loan interest (§163(h)(4)), the deduction at 65 (§151(d)(5)(C)), and giving without itemizing (§170(p)). If any of them applies to you, your real federal tax is lower than the figure above. Take-Home and Federal Income Tax ask for them and apply them.
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