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    sugarbaire's Avatar
    sugarbaire Posts: 3, Reputation: 1
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    #1

    Apr 6, 2009, 12:46 PM
    401K withdrawal
    If I was laid off from my job and had a 401K that I am withdrawing in lump sum, I realize I have to pay 20% taxes, but will I be charged the 10% penalty? I am 58
    MukatA's Avatar
    MukatA Posts: 7,110, Reputation: 176
    Tax Expert
    		  
    #2

    Apr 6, 2009, 01:13 PM

    However, this additional tax will not apply if the payments are made after your separation from service in or after the year you reached age 55, or if the payments are part of a series of substantially equal payments that are paid over your life.read Your U.S. Tax Return: Elective Deferrals 401(k) Plans
    ebaines's Avatar
    ebaines Posts: 12,131, Reputation: 1307
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    #3

    Apr 6, 2009, 02:08 PM

    20% is the rate that taxes are automaticaly withhheld from your 401(k) distribution - your actual tax rate depends on your particular circumstance. Deending o nwhere you love you may also have state and/or local taxes as well. The good news is that you are not socked with the 10% early withdrawal penalty as long as you separated from service from the company that has your 401(k) at age 55 or later.
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