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

    May 4, 2007, 07:00 AM
    Paying feder tax on a cashed in 401K
    I am 52 and want to cash in part of my 401k. I am aware of the 10% penalty and the federal tax I must pay. My question is "Can I pay the federal tax immediately when I cash in the 401k?" The reason is I do not want to show this on my annual W2 that I file with my husband, because I do not want him to know. Can I file a W2 immediately when I cash this 401k in?
    ScottGem's Avatar
    ScottGem Posts: 64,966, Reputation: 6056
    Computer Expert and Renaissance Man
    		  
    #2

    May 4, 2007, 07:06 AM
    No. First, I would strongly advise against taking such a withdrawal. The Plan administrators will be required to send a 1099R form to you stating the withdrawn amounts. This amount has to be included on your 2007 tax return. So if you are filing jointly, then your husband WILL find out about it.

    Have you investigated taking a loan instead? This will not result in any tax consequence. So nothing needs be filed on your return. A loan would satisfy your requirement of keeping this a secret from your husband (though that opens up a whole other can of worms), unless he sees your paystubs.
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