Unfortunately, I have to cash out my 401k. My question is when I cash out my 401k can I pay 35% federal tax now to cover the 10% penalty assuming my tax rate is 25%?

Yes, but do NOT forget the state income tax, which you must also pay.

Depending on the state, your state tax burden ranges from ZERO to 12%.

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Originally Posted by AtlantaTaxExpert

Yes, but do NOT forget the state income tax, which you must also pay.

Depending on the state, your state tax burden ranges from ZERO to 12%.

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Thank you.

Glad to help!