View Full Version : Covering the 10% 401k penalty
jglocke
Jun 29, 2012, 07:59 AM
Unfortunately, I have to cash out my 401k. My question is when I cash out my 401k can I pay 35% federal tax now to cover the 10% penalty assuming my tax rate is 25%?
AtlantaTaxExpert
Jun 29, 2012, 08:16 AM
Yes, but do NOT forget the state income tax, which you must also pay.
Depending on the state, your state tax burden ranges from ZERO to 12%.
jglocke
Jun 29, 2012, 08:21 AM
Yes, but do NOT forget the state income tax, which you must also pay.
Depending on the state, your state tax burden ranges from ZERO to 12%.
Thank you.
AtlantaTaxExpert
Jun 29, 2012, 08:25 AM
Glad to help!