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

    Jun 29, 2012, 07:59 AM
    Covering the 10% 401k penalty
    Unfortunately, I have to cash out my 401k. My question is when I cash out my 401k can I pay 35% federal tax now to cover the 10% penalty assuming my tax rate is 25%?
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #2

    Jun 29, 2012, 08:16 AM
    Yes, but do NOT forget the state income tax, which you must also pay.

    Depending on the state, your state tax burden ranges from ZERO to 12%.
    jglocke's Avatar
    jglocke Posts: 2, Reputation: 1
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    #3

    Jun 29, 2012, 08:21 AM
    Quote Originally Posted by AtlantaTaxExpert View Post
    Yes, but do NOT forget the state income tax, which you must also pay.

    Depending on the state, your state tax burden ranges from ZERO to 12%.
    Thank you.
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
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    #4

    Jun 29, 2012, 08:25 AM
    Glad to help!
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