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    kitkat6187's Avatar
    kitkat6187 Posts: 1, Reputation: 1
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    #1

    Sep 29, 2008, 12:43 PM
    401 k early withdraw
    I have a 401k worth 215,000.00 I am thinking about withdraw to pay off my house. I am getting scared of all this 1929 mess. I am 53 years old. Does anyone know what my total tax bill would be like? I live in the state of GA, contributed to this in GA, but also have a residence in Tennessee. Where should I take the withdraw? I also work in SC
    MukatA's Avatar
    MukatA Posts: 7,110, Reputation: 176
    Tax Expert
    		  
    #2

    Sep 29, 2008, 08:37 PM

    What ever you withdraw will be subject to 10% early withdrawal penalty. Also the entire withdrawal must be included as ordinary income on your tax return.
    It will be reported on the state return that is your tax home.
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #3

    Sep 30, 2008, 12:41 PM
    Four words: DO NOT DO IT!

    The tax bill would be AT LEAST $75,000 and could be as high as $107,500.

    Despite the media hype, we are NO WHERE NEAR what happened in 1929. Just continue paying your mortgage on time, pay the rest of your bills on time and do NOT touch that 401K. If you are scared about what is happening in the market, you can transfer the 401K money into stable, low yield CDs or some other liquid investment.
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