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

    Mar 7, 2007, 09:00 PM
    401k Taxes & Penalties
    I am 56 years old and am close to losing my job. I have approximately $21,000 in a 401k plan with my current employer. Will I be excluded from the 10% penalty because of my age? Will the entire amount of my withdrawal be treated as income for the year I receive the withdrawal?
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
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    #2

    Mar 8, 2007, 03:25 PM
    The entire amount will defnitely be treated and taxed as income.

    You may be able to avoid the 10% Early Withdrwal Penalty, depending on the nature of your "departure" from your current job.

    In any event, I recommend you roll the money over to an IRA and avoid taking any distribution if you can avoid it.

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