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!

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Originally Posted by Nelly51

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!

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If thisis the same loan you posted in April the posts should be combined.

Scottgem gave you advice at that time.

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.

Very helpful! Thank you