AboutDavid M Iannopollo Expertise I am a professional financial advisor who can assist you with answers on mutual funds, annuities, IRA's, rollovers, qualified and non-qualified retirement plans, retirement planning, educational planning, life, disability and LTC insurances.
Experience I have over 20 years experience in the business and financial world.
Question I want to take a hardship withdrawal from my 401k account through my employer. My home is in foreclosure and I have the documents to support this for the withdrawal. My employer required that I first take a loan for half of the amount in this account and now will be allowed to take the other half through hardship. All of the funds in this account were rolled over from a QDRO account through my divorce one year ago. Will I be subject to any taxes on this early withdrawal?
Answer Hi Ellen,
A hardship withdrawal only allows you to avoid the 10% early withdrawal penalty. You will still be subject to ordinary income tax on any amount withdrawn. It will be reported to the IRS so there really is now way around the taxes. Keep in mind, this will increase your tax liability for the year so you should consult with an accountant to avoid any surprises. Sorry I couldn't bring better news but I wish you the best of luck with your situation.
