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    sjf9001's Avatar
    sjf9001 Posts: 1, Reputation: 1
    New Member
    		  
    #1

    Sep 3, 2008, 06:09 AM
    Cash out 401k
    I 'm moving to Cancun Mexico when I retire this month. I would like to cash out my 401K,
    Do I pay taxes when I cash out or when filing an tax return which will be hard since I will
    Be out of the country.
    ebaines's Avatar
    ebaines Posts: 12,131, Reputation: 1307
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    #2

    Sep 3, 2008, 10:13 AM
    When you take the withdrawal from your 41(k) they will automatically withhold 20% for federal income taxes. If you are in a higher tax bracket you will have to pay the difference when you file your federal return at the end of the year. If you are in a lower bracket, you will get a refund when you file. Also, don't forget that if you are resident of a state/municipality that has income taxes, and you receive your distribution before moving to Mexico, you will owe those taxes as well.
    MukatA's Avatar
    MukatA Posts: 7,110, Reputation: 176
    Tax Expert
    		  
    #3

    Sep 3, 2008, 06:14 PM
    The plan administrator will withhold federal income tax. You must file your income tax return and report the withdrawal as income.
    Read Your U.S. Tax Return: Elective Deferrals 401(k) Plans
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