Ask Experts Questions for FREE Help !
Ask
    Nelly51's Avatar
    Nelly51 Posts: 3, Reputation: 1
    New Member
    		  
    #1

    Sep 29, 2008, 08:47 AM
    401(k) withdrawl
    Hi _ I recently deemed my 401(k) loan of $46,000. Can anyone suggest on how much I need to save to pay for the taxes on the early withdrawl. My husband and I make around $125,000 so I'm not sure what tax bracket that $46,000 will put us in and what we need to save to pay for the deemed loan. Please advise. Thank you!
    JudyKayTee's Avatar
    JudyKayTee Posts: 46,503, Reputation: 4600
    Uber Member
    		  
    #2

    Sep 29, 2008, 09:08 AM
    Quote Originally Posted by Nelly51 View Post
    Hi _ I recently deemed my 401(k) loan of $46,000. Can anyone suggest on how much I need to save to pay for the taxes on the early withdrawl. My husband and I make around $125,000 so I'm not sure what tax bracket that $46,000 will put us in and what we need to save to pay for the deemed loan. Please advise. Thank you!

    If thisis the same loan you posted in April the posts should be combined.

    Scottgem gave you advice at that time.
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #3

    Sep 29, 2008, 09:44 AM
    Nelly51:

    You owe AT LEAST $4,600 for the 10% Early Withdrawal Penalty. That tax CANNOT be mitigated by exemptions, deductions or credits.

    You are squarely in the 28% tax bracket, so add another $12,880 to your tax bill, for a total of $17,480.

    This does NOT consider state income taxes, which are also due, but I cannot determine your state tax liability because you did not identify the state.
    Nelly51's Avatar
    Nelly51 Posts: 3, Reputation: 1
    New Member
    		  
    #4

    Sep 29, 2008, 10:38 AM
    Comment on AtlantaTaxExpert's post
    Very helpful! Thank you
Not your question? Ask your question View similar questions
 

Question Tools Search this Question
Search this Question:

Advanced Search

Add your answer here.


Check out some similar questions!

401 k early withdrawal [ 4 Answers ]

I was just let go of my job after 10 years of service. My question is can I cash in my 401 K in full without paying any penalties for early withdrawl? I do not plan on rolling it over. I am 57 years old. I do know that I will have to pay taxes on it as it will be added too my annual income. ...

401 k withdrawal [ 2 Answers ]

I am 48 years old I owe $144,000 on my house with a 30 year mortgage fixed ,would it be worth it to take my 401 k money and pay off my house? Can I do this with a Hardship withdrawl.

Ira withdrawal [ 3 Answers ]

What are the penalties for an early ira withdrawl? I have an emergency situation where I need a small amount of cash. The account is in another state that I plan to visit shortlly.

View more questions Search