PDA

View Full Version : 401k Hardship


Question Guide
Feb 27, 2017, 08:37 AM
I am a 1st home buyer 45 year's old I live in Texas I made $65,139 and have a daughter 16 and my mom who is 68 is my dependent she is ill and lives with me.

I pay for parking $1,100 a year 2016

I donated to the church $1,000 2016

I use my car for work and had to get all 4 new tires 2016

I was told I was getting laid off and given documentation to prepare for several of us at the company being laid off. I wanted to secure a home for us and applied for $55,583.33 hardship with my 401K to purchase my 1st and only home for my family.

They withheld $5,583.33 any idea what I'm looking to pay the IRS? I had to put a roof and have a few things fixed.

ebaines
Feb 27, 2017, 11:19 AM
Your income for the year equals your wages of $65K plus the 401(k) withdrawal for a total of about $120K. This puts you in the 25% bracket (assuming you file as Head of Household). It's impossible for us to predict what your taxes will be without knowing all your details, but as an estimate you can expect to pay 25% tax on this withdrawal plus the 10% early withdrawal penalty, for a total of 35%. This equals about $19.4K, minus the $5.5K already withheld means you will owe about $14K at tax time. Also, if you live in a state that taxes 401(k) withdrawals you will owe them as well.

AtlantaTaxExpert
Feb 28, 2017, 11:10 AM
Since he lives in Texas, no state tax will be due.

This return SCREAMS for the need for professional tax help.

ebaines
Feb 28, 2017, 12:58 PM
Ah yes - I missed the part that he lives in TX. Good catch.