hi friends I am having problem to understand 401k withdrawing thing. I quit the job and i do not have job right now, so i decided to withdraw my 401k. I just have around $1070 lump sum, which i would like to cash.  i was trying to do online, which asked me question about federal & state taxes. i do not know which option to  click. i undertand that i have to pay tax & penalty which i am ready to pay. i live in California. please, just tell me which option I have to select on federal & state tax so that i won't be on trouble later..... thank u Federal Income Tax Withholding Federal Income taxes will be withheld from your payment in an amount equal to 20% of the taxable portion of the payment, which is eligible for rollover, which you do not elect to directly roll over to an eligible retirement plan. You may elect additional federal income tax withholdings by selecting the appropriate box below and completing the applicable blank.  I elect not to have any additional federal income taxes withheld from my payment from the Plan.  In addition to the mandatory 20% federal income tax withholding, I elect to have an additional $  withheld from my payment. In addition to the mandatory 20% federal income tax withholding, I elect to have an additional  % from the portion of my payment, which is eligible for rollover, which I do not elect to directly roll over to and eligible retirement plan.  State Income Tax Withholding Mandatory state income tax withholding may also apply to your payment from the ABC COMPANIES, INC. Plan. If so, the ABC COMPANIES, INC. Plan will automatically withhold the required amount for state income taxes. If state income tax withholding is not mandatory for you, you may elect whether and how to have state income tax withheld from your payment by selecting the appropriate box below and completing the applicable blank (if any).  I elect not to have state income taxes withheld from my payment from the Plan.  I elect to have the following amount withheld from my payment from the Plan for state income taxes: $  I elect to have  % of my payment from the Plan withheld for state income taxes.  Insufficient Withholding Note: If you do not have enough federal or state income tax withheld from your withdrawal, you may be responsible for paying additional taxes. You may also be penalized under the estimated tax rules if your withholding and the tax payments are not sufficient.