When are taxes taken when you have money taken out for a 401-k deduction?

Taxes are imposed when you file your income tax return at the end of the year. Often, people think they have paid taxes on their 401K when they withdraw money from the plan. What happens is that the company handling the 401K plan will usually withhold federal income tax when you make a withdrawal. The taxes withheld is just like when taxes are withheld from your paycheck, in that this is merely a time that you make a preliminary payment toward your potential tax bill. When you file your return is when your actual taxes due are determined and based on the tax amount due, you may owe more or you may receive a refund of the amount you had withheld. You must be careful in that there are penalties for not paying close to the amount due during the year when the income is received.