I have a 401k with less than a $1,000 in it. I wanted to know what the taxes would be? I quit that job and need to get it out. I need to know if I should transfer it of take it out?

Transfer it into a rollover IRA. You can go to any bank, mutual fund or brokerage house and they will help you with the transfer. That way, you can get the money out tax-free and later transfer it into the 401K of your new employer.

If you take it out and spend it, the custodian will withhold 20% (required by law). You will pay taxes at whatever your tax rate is for both federal and state PLUS a 10% early withdrawal penalty which cannot be mitigated. That means that you will pay the 10% penalty even if you owe no other tax.

Did you start your business after leaving your old job? If so, you can open a Solo 401k and transfer your old 401k into it tax free (trustee-to-trustee transfer). A solo 401k is for the self employed and allows for rollovers, transfers and high contributions. You can learn more at: http://www.mysolo401k.net/Contributions.html

Jboyle - you should notice that (a) the original post is 5 years old and (b) the poster said nothing about starting a business.