401K Withdrawals
Can I still withdraw funds from my, tax-deferred, 401K so that they are taxed for 2018? I had heard somewhere that I have until April 2019 to do so. Thanks,
Terry Says
If you are talking about taking your Required Minimum Distribution because you reached age 70-1/2, there IS a grace period until April 1st to take that FIRST distribution. So if you turned 70-1/2 in 2018, you would have until April 1st to take the RMD. Subsequently, you must take your RMD before the end of the calendar year — based on the previous year’s year-end valuation.
But if you are taking money out of a 40l(k) for any other reason than an RMD, you must pay taxes in the year in which the money is received. (Plus a 10% early withdrawal penalty if you are under age 59-1/2.)
