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resnlloydeff
Jun 28, 2008, 08:10 PM
What penalty and tax rate would I have to pay if I cash in a 401k plan?
Fr_Chuck
Jun 28, 2008, 08:21 PM
moved from forum help
MukatA
Jun 29, 2008, 12:10 AM
The early withdrawal penalty is 10% and all the money withdrawal will be treated as ordinary income which you must report on your tax return.
AtlantaTaxExpert
Jun 30, 2008, 09:53 AM
FOUR WORDS: DO NOT DO IT!

Depending on your tax bracket, you could pay almost 50% in taxes on this money.

For sure, you will pay the 10% Early Withdrawal Penalty, as that 10% CANNOT be mitigated by deductions or credits.

More than likely, you would pay between 25% - 40%.
ScottGem
Jun 30, 2008, 10:38 AM
The tax rate would depend on your tax bracket and whether there are local income taxes in addition to federal. Its posible the proceeds of the withdrawal will put you into a higher bracket increasing your total tax liability.

So like ATE said DON'T DO IT!