I'm going to give a couple situations, you figure out which is correct for you --

You took $10,000 out of your 401(k), had $2000 withheld for federal taxes and so received $8000. Three weeks later you rolled the $8000 into a traditional IRA. On your tax return, you would show a gross distribution of $10,000 with a taxable amount of $2000 (no penalty because of your age), and show the $2000 on the withholding line. You would get most of the $2000 back.

You took $10,000 out of your 401(k), had $2000 withheld for federal taxes and so received $8000. Three weeks later, you took some money out of savings, and put $10,000 into a traditional IRA. On your tax return, you would show a gross distribution of $10,000 with a taxable amount of zero, and show the $2000 on the withholding line. You would get all of the $2000 back.

You took $10,000 out of your 401(k), had $2000 withheld for federal taxes and so recieved $8000. You rolled any or all of it into a Roth IRA. On your tax return, the full $10,000 would be taxable, as Roths are funded with after-tax money.

I am 60 years old and withdrew 100,000 dollars which 20% went to taxes but the 80,000 I had left I purchased a foreclossure home for retirement. How will this affect my taxes other than putting me possibly in a higher tax bracket. thanks for any info.

Debbiedean - you may well have to get out the checkbook this April 17th. The 20% withholding was a downpayment on your tax bill, but may not have been sufficient, especially if you have any other income. Using the money to buy a house will not change its taxability.

Without knowing an awful lot about your tax situation, I cannot give an accurate answer.