:confused: Could someone answer a really weird question ? can I use my very small 401k to pay the irs?
thanx,
mamasu2

I would DEFINATELY advise against that. You would end up paying 30-50% taxes and penalties on the money that you would withdraw from it. It just doesn't make sense to do that. If you owe the IRS, they will set up a payment plan with you that is usually at relatively reasonable interest rate. Or you can pay with a credit card. But it just isn't a good idea to use your 401K to pay the IRS. No, No and double no no.

Thank you so much for your response. I am already on a payment plan. I have been paying them 200.00 a month for two yrs and i still owe as much as I ever did..I would rather take out what I can get and try to do it that way, there has to be a better way...but again thank you for your answer.
mamasu2:)

See if you can take a loan against the 401K. At least then you will be paying yourself back.

thank you so much for your answer. I am going to look into asking for a loan.mamasu2

Agreed! Loan is the best option, though you MAY want to look into an Offer in Compromise.

I dont have enough available for a loan,,,this is too confusing for me....i need to just take out the entire 401k, but i don't want to quit my job, just yet.

You don't need to quit your job to wiothdraw money from your 401K. However, with tax liability and 10% penalty, it doesn't really make sense to do so.

If your payment plan is not cutting down the amount of tax owed, you need to talk with the IRS about an Offer in Compromise.