Taxes On 401 K

Question

Dec 28, 2006, 11:58 AM

dgmorris2007

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Join Date: Dec 2006

Posts: 1

Taxes On 401 K

Is it true. That in the state of Oregon. You can Do a Hardship withdrawal on 401k and pay taxes on the amount you receive at the end of the tax year. Or is it mandated that you pay all taxes up front prior to withdrawal.

Answers

Dec 28, 2006, 01:08 PM	#2

ScottGem Computer Expert Join Date: Jan 2003 Location: LI, NY - USA Posts: 23,128 Pay to call ScottGem for advice ($.75/min)	401K are governed by FEDERAL law which supercedes any state statutes. By federal law, the plan administrator is required to withhold 20% of any distribution prior to age 59 1/2 to cover federal taxes. This is a withholding just like what's taken from your salary. You can't pay the actual taxes until you file your return.

Dec 28, 2006, 03:59 PM	#3

AtlantaTaxExpert Tax Expert Join Date: Feb 2005 Location: Atlanta, Georgia Posts: 9,873	ScottGem is correct tha federal law is the guiding principle. However, in most cases, the 20% withholding is a down payment on the taxes owed. The fedeal taxes can hit 35%, plus whatever state taxes are imposed (which, in some states, can be as high as 11%).

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