Hi,
We had a 401K cashed out in 2008... total value was $13276. With an outstanding loan of $4455. We got a cash out of $6160.

We know that they withheld some taxes but are not sure if we are going to end up oweing more and if so what?
Any advice would be helpful!

You will pay a punitive 10% Early Withdrawal Penalty of $1,328, even if all of your expenses, deductions and credits completely wipe out any other tax liability.

Further, $13,276 will be added to your other income to be taxed as ordinary income, probably at a tax rate of at least 15% and possibly higher.

Finally, you will also have to pay state income taxes on the $13,276.

BOTTOM LINE: Expect to pay somewhere between 25 - 46% in taxes on that 401K withdrawal.