hi, can someone please tell me how many % is taxable in a 401k withdrawal and is this on top of the 10% penalty?? if you use the withdrawal to buy a house is there a tax break??? Iam 32 years old and the amount is 31,600 and when do i pay the penalty and the tax? any other alternative with less tax??
There is NO tax break for withdrawing from a 401K to buy a house.
There is a tax break for withdrawing up to $10,000 from a traditional IRA to buy a house for the first time.
You may want to consider borrowing from your 401K for the house. Most companies permit this, though it is discouraged.
Depending on your income bracket, you could pay up to 35% in taxs on top of the 10% early withdrawal penalty.
An alternative is to roll over $10,000 from the 401K to a rollover IRA, then do the withdrawal from the IRA. If you have a spouse, he can do the same thing.
Iam 32 years old and the amount is 31,600 and when do i pay the penalty and the tax? any other alternative with less tax??
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