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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!