How much penalty will I owe at tax for cashing out your 401k?

The early withdrawal penalty amount is 10 % of the taxable amount if you are under the age of 59 1/2 and still employed by the employer that has the 401K plan.

The below information is one of the exclusion from the 10% early withdrawal penalty.

If you are no longer employed (terminated left the company) by the employer that has the plan in or after the year that you turn age 55 the 10 % early withdrawal penalty would NOT apply to the taxable distribution amount.

The taxable amount of the distribution will be added to all of your other gross worldwide income on your 1040 income tax return and taxed at your marginal tax rate.