Ask Experts Questions for FREE Help !
Ask
    rv4949's Avatar
    rv4949 Posts: 1, Reputation: 1
    New Member
    		  
    #1

    May 31, 2008, 01:52 PM
    Laid off and had to use my 401K
    I was 58 when I was separated from my last employer. I have not found a job and kept up my Cobra to cover a hip replacement. I had to use the money to cover my living expenses and co-pays. Will I have to pay the penalty on top of the other taxes?
    progunr's Avatar
    progunr Posts: 1,971, Reputation: 288
    Ultra Member
    		  
    #2

    May 31, 2008, 02:05 PM
    Yes. Early withdrawal penalty in addition to the income tax on the amount of money you received.
    LisaB4657's Avatar
    LisaB4657 Posts: 3,662, Reputation: 534
    Expert
    		  
    #3

    May 31, 2008, 02:15 PM
    According to IRS Publication 590, if you are over 55, lose your job and take money from your IRA to help cover your living costs then you have to pay taxes on the money you withdraw but there is no penalty.
    Fr_Chuck's Avatar
    Fr_Chuck Posts: 81,301, Reputation: 7692
    Expert
    		  
    #4

    May 31, 2008, 02:39 PM
    I will agree with Lisa, no you should not, did they with hold the 10 percent when you withdrew the funds?
    ebaines's Avatar
    ebaines Posts: 12,131, Reputation: 1307
    Expert
    		  
    #5

    Jun 2, 2008, 08:01 AM
    Another vote for no penalty - since you were 55 or older when you were separated from service. They should have withheld 20% from your withdrawals for federal income tax - of course the actual amount you will owe in income tax can't be determined until you file your taxes next year. Also, if you live in a state that has income tax you will have to pay that as well.
Not your question? Ask your question View similar questions
 

Question Tools Search this Question
Search this Question:

Advanced Search

Add your answer here.


Check out some similar questions!

My bird laid an egg! [ 5 Answers ]

I have a pair of cockatiels and she has laid her first egg. I was unaware that she was pregnant. She laid it on the bottom of the cage and now she want sit on it. What do I do I don't want it to die?:eek: <Moderator Note: Moved from Hobbies to Other Pets & Animals>

401K or Roth 401K [ 3 Answers ]

Hai, I am an Indian, presently working for a USA company. I will be in US for next 2-3 years and then I will return back to my country. My employer gave the option to enroll for 401K plan or Roth 401k or a combination of both. And the employer matches my contribution at the rate of 50cents on a...

Laid off need to get out of lease. [ 3 Answers ]

I am in an Arizona rental agreement. I am renting a house. I got laid off from my job. I have not found another job and I am running out of money. Can I get out of this lease early (it is up in April). If I can get out of the lease do I lose my deposit?

I have laid ceramic tile in my bathroom, [ 1 Answers ]

I'm wondering if I have to grout between the wall and the tile? I'm not putting tile on my walls, just going to have baseboards and trims!

Porcelain tile laid over mastic [ 4 Answers ]

I have removed old 9x9 tile from my basement floor can I lay porcelain tile over the mastic or do I need to use a disolving solvent? Also will the moisture because it's a basement effect the tile sticking? Thanks... blmgreek

View more questions Search