[timskin38]

Hi , I recently cashed out my 401k,I was 100 % vested I'm 40 yrs old, what are my taxes and pentalties of 15,700 dollars

[mr.yet]

Approx. 20 to 30%

[RickJ]

The penalty itself is 10%.

After that the tax is capital gains; at the rate applicable for your income level.

[AtlantaTaxExpert]

Timskin38:

The percentages given by Mr. Yet may not be accurate. It depends on whether the 401K cashout is your only source of income, your filing status and whether you have dependents.

Rickj's statement that the penalty is 10% IS accurate, and that 10% penalty cannot be mitigated! In other words, if you had a spouse and the $15,700 was your only taxable income, you would owe no income taxes because the combined total of your standard deduction ($10,000) and your personal exemptions ($3,200 each for $6,400) would exceed the $15,700. However, you would still owe the 10% ($1,570). You cannot apply exemption/deductions against the 10% penalty.

Finally, the cashout is taxed as ordinary income, not as a capital gains!