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    rav471's Avatar
    rav471 Posts: 2, Reputation: 1
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    #1

    May 31, 2007, 09:25 AM
    401k penalties
    I am wondering if you can tell me what the total penalty and taxes will be if I withdraw $8500. From my 401k? I am recently divorced and really need money to replace my car (unfortunatly I can't afford a car payment right now). Thanks
    ebaines's Avatar
    ebaines Posts: 12,131, Reputation: 1307
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    #2

    May 31, 2007, 09:39 AM
    It depends on what your tax bracket is, for both the Feds and state. Add up the following: Fed tax bracket + state tax bracket + 10%.

    Have you considered taking a loan against your 401(k), as opposed to an outright withdrawal? That way you can pay yourself back over time, and avoid the penalties.
    rav471's Avatar
    rav471 Posts: 2, Reputation: 1
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    #3

    May 31, 2007, 10:43 AM
    Thanks for the reply. How do I find my tax bracket? I am totally inept when it comes to taxes!
    ebaines's Avatar
    ebaines Posts: 12,131, Reputation: 1307
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    #4

    May 31, 2007, 11:35 AM
    It depends on your Adjusted Gross Income (taxable income less exemptons and deductions), and your filing status. For federal taxes it could be anywhere from 10% to 35%. If you know your Adjusted Gross Income from your 2006 tax return, you can find your tax bracket here: Reference Room. Since you didn't say what state you live in I can't help you with that.
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
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    #5

    Jun 3, 2007, 04:44 PM
    Ebaines has covered all pertinent issues.
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