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randybrookins
Apr 28, 2009, 06:44 PM
how much tax do you have to pay back when you take money out of your 401k plan using it for closing costs on a house.
pathisfer
Apr 28, 2009, 06:56 PM
If it's your first home purchase then there is no penalty but you pay ordinary income taxes on it (up to 10k, I think) but first you want to roll over that money into what's called a rollover IRA and withdraw it from there. If you take it out of your 401k, you will have to pay it back with interest.
MukatA
Apr 28, 2009, 11:12 PM
You will pay 10% early withdrawal penalty and the withdrawal will be treated as ordinary income. Withdrawal for home purchase is not an exception to early withdrawal.

Instead you can may be able to get loan from your 401K administrator.
read Your U.S. Tax Return: Elective Deferrals 401(k) Plans (http://taxipay.blogspot.com/2008/08/elective-deferrals-401k-plans.html)