I live in PA and I was considering taking out 2,300.00 from my 401K. I need this to pay off my mortgage because I am currently unemployed. The way my plan works is I have to add the costs of City & State on top of what I need to deduct. Can someone give me some help in trying to calculate exactly what I need to take out so I am not owing in 2010? Also, If I take out in 2010, will this be on my 2009 taxes or will it be on 2010?

If you make the withdrawal in 2010, you will not account for it until the 2010 tax return, which can be filed no earlier than 2 January 2011.

You will pay a 10% Early Withdrawal Penalty which cannot be mitigated. This means that, even if, after deductions, credits and exemptions, it turns out your income is so low that no income taxes are due on the 401K distribution, you will still have to pay the 10% penalty.

As a result, you will owe AT LEAST $230.

The total tax rate will depend on your overall income level, not just the $2,300 401K distribution.