Access Leading Tax Experts And Technology
In Our Global Digital Marketplace

Please Type Topic Into Search Bar

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 378 weeks ago

Meet Leading Tax Advisors

User Photo John Stancil



User Photo Peter J. Scalise

Federal Tax Credits & Incentives Practice Leader

New York, NY

User Photo John Dundon, II EA

Tax Director

Denver, CO

User Photo John Richardson


Toronto, Canada

User Photo William Rogers, CFP, MBA, EA

CEO/Certified Financial Advisor

Rancho Santa Fe, CA

User Photo Monika Miles


San Jose, CA

User Photo Blake Christian

Tax Partner

Long Beach/ Park City, CA


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



Learn from tax advisors, straight to your inbox

Update My Email Address
Contact Us Today