View Full Version : 401(k) withdrawal
Nelly51
Sep 29, 2008, 08:47 AM
Hi _ I recently deemed my 401(k) loan of $46,000. Can anyone suggest on how much I need to save to pay for the taxes on the early withdrawl. My husband and I make around $125,000 so I'm not sure what tax bracket that $46,000 will put us in and what we need to save to pay for the deemed loan. Please advise. Thank you!
JudyKayTee
Sep 29, 2008, 09:08 AM
Hi _ I recently deemed my 401(k) loan of $46,000. Can anyone suggest on how much I need to save to pay for the taxes on the early withdrawl. My husband and I make around $125,000 so I'm not sure what tax bracket that $46,000 will put us in and what we need to save to pay for the deemed loan. Please advise. Thank you!
If thisis the same loan you posted in April the posts should be combined.
Scottgem gave you advice at that time.
AtlantaTaxExpert
Sep 29, 2008, 09:44 AM
Nelly51:
You owe AT LEAST $4,600 for the 10% Early Withdrawal Penalty. That tax CANNOT be mitigated by exemptions, deductions or credits.
You are squarely in the 28% tax bracket, so add another $12,880 to your tax bill, for a total of $17,480.
This does NOT consider state income taxes, which are also due, but I cannot determine your state tax liability because you did not identify the state.
Nelly51
Sep 29, 2008, 10:38 AM
Very helpful! Thank you