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

    Apr 26, 2011, 08:34 AM
    Is there any way to change how we took money out of a 401k?
    My husband took money out of our 401K plan to put down on a new home. He knew there was a tax penalty, which we paid up front. However, we didn't research this option enough and discovered this amount was added to our taxable income. We owe a ton now! I thought we borrowed the money, but we actually didn't. Any way of fixing this issue or are we stuck losing our entire savings?
    smoothy's Avatar
    smoothy Posts: 25,492, Reputation: 2853
    Uber Member
     
    #2

    Apr 26, 2011, 09:13 AM

    Legally once the money is disbursed.. (as in it touches your hands metaphorically).. the deed is done.
    ebaines's Avatar
    ebaines Posts: 12,131, Reputation: 1307
    Expert
     
    #3

    Apr 26, 2011, 09:35 AM

    Check with your plan administrator, but I believe that you can actually return the money within 60 days and essentially "undo" your withdrawal. But to make this work you must return the ENTIRE withdrawal, including the amount that was withheld for taxes. So you have to come up with more cash than you actually received.

    BTW - what they took up front should have been 20%, which is withholding against your income taxes, NOT just for the 10% early withdrawal penalty. What you really owe in taxes is dependent on your new, higher tax bracket plus the 10% penalty, minus the 20% already withheld. And you may also owe state income tax as well, depending on where you live.

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!

How do I get my money from my 401k k? [ 2 Answers ]

I have worked at a hospital for almost 15 years and now I am in a low paying job.. single mother and about to be evicted and lose my vehicle. I need financial help bad... please help. How can I find out what I can get out of my 401k from the hospital?

Get money from 401k [ 1 Answers ]

I stopped my 401k how can I get my money

401K money [ 1 Answers ]

How do I find my 401K and take money out of it?

401k money. [ 1 Answers ]

How do I go about getting my 401k money back from my previous jobs?

Need money from my 401k [ 2 Answers ]

Hello, I was just wondering if anyone knew the answer to this question. I am only 31 and I want to cash out my simple 401k that I have now and am still with the same emloyer. I want it to pay off my debt. Is there anyway I can get that money? I don't care if I pay a penalty at this point. Do I...


View more questions Search