TaxConnections

Login | TAXPAYERS JOIN HERE | TAX PROFESSIONALS JOIN HERE

I am considering withdrawing money from my 401K (I think it is an IRA now, because I don't work at that company anymore) to pay off debt. How much should I save (%) for taxes?

401K IRA
TaxConnections Members... Answer This Question Want To be One of Our Tax Experts? Register Here

Tax Professional Answers

User Photo
William Keats
It all depends on how much you withdraw from your IRA (assuming you rolled over your 401(k) into an IRA), as well as your other income and your age. If you are younger than 59 1/2 years old you could be hit with a 10% penalty in addition to the tax liability portion. A short-term personal loan from a bank, credit union, or cash value life insurance policy is a better bet than a withdrawal from the IRA: no taxes. If you make the IRA withdrawal, the trustee will withhold 10% federal tax. You may pay more tax (plus possible penalty) when you file the return.
Leave a Comment 274 weeks ago

Meet Leading Tax Advisors

User Photo Peter J. Scalise

Federal Tax Credits & Incentives Practice Leader

New York, NY

User Photo John L Stancil

Tax Advisor/CEO

Lakeland, FL

User Photo John R Dundon, II EA

Tax Director

Denver, CO

User Photo Kevin Johnson MS, JD, LL.M, CPA

Partner

Philadelphia, PA

User Photo Brian Weaver, CPA, MBA

Managing Tax Consultant

Des Plaines, IL

User Photo William Rogers, CFP, MBA, EA

Rancho Santa Fe, CA

Title

User Photo Clinton J Donnelly, LLM

International Tax Advisor

Panama City, Panama

User Photo Jim Marshall, EA

President/ Tax And Financial Advisor

Scottsdale, AZ

User Photo Brett A Thompson, JD, CPA

Managing Tax Lawyer

Katy, TX

User Photo Charles Woodson, EA

Tax Advisor/Fiduciary Coach

San Diego, CA

User Photo John Richardson

Tax Lawyer

Toronto, Canada

User Photo Clifford Benjamin

Senior Tax Principal

Daytona Beach, FL

User Photo Kazim Qasim, EA, CTC

Managing Tax Advisor/CEO

Orlando, FL

 

View/Select our Current List of Tax Topics

# A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Previous PageNext Page

INCREASE KNOWLEDGE WITH EVERY ISSUE OF TAXCONNECTIONS

 

Learn from tax advisors, straight to your inbox

Update My Email Address
Contact Us Today