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nkyguy1988 t1_jecpshx wrote

The 20% is just the prepayment withholding. What you owe will be based on your income tax rate. Why do you think you won't pay the tax rate plus the 10% penalty?

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Overthinkingopal OP t1_jectt6a wrote

From what I’ve read online and what the people at MERS told me there is no 10% penalty for this type of account. Just the 20% tax and 2.4% state.

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nkyguy1988 t1_jecv7ko wrote

Forgot you said 457. That would be true. Depending on your income tax rate, your actual tax obligation may be more or less than 20%. Considering there isn't a tax bracket that is 20%, it's highly likely you either over or under pay. Withholding on withdraw does not equal your final tax obligation.

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