Distributions

Can I take a distribution from my Solo 401k? Will I owe taxes? At what age can I distribute from my Solo 401k without penalty?

Answer:

You are eligible to take a distribution from your Solo 401k after you reach age of 59 1/2. The Normal Retirement Age (NRA) for the Solo 401k Plan is 60 years old.

The distribution form can be accessed here:

Forms to Administer Solo 401k Plan

Early distributions (those taken before Normal Retirement Age) from the Solo 401k will incur penalty in addition to taxes. Unless you are taking distributions from a Roth account, you will be taxed on the amount that you take out. Please review the following regarding withholding mandatory 20% tax:

Withholding 20% Tax on Distribution

Distributions are taxable and reportable and must be reported to the IRS on a form 1099-R. You are responsible for filing 1099-Rs on behalf of your plan.

Consult with your CPA or tax advisor for more information on the effect of distributions from your Solo 401k.