2007-01-22 11:16:00 · 5 answers · asked by nita 1 in Business & Finance ➔ Personal Finance
Probably not a good idea. You will get taxed for sure if you take money out of your 401K. I wouldn't do it unless it's your last resort.
2007-01-22 11:19:15 · answer #1 · answered by Mariko 4 · 0⤊ 0⤋
yes it does...and if you're under age 55 then you'll also get hit with an extra 10% tax when you're doing your taxes.
While there are circumstances where you should tap that 401k early...they are few and far between. And most importantly...paying off debts, buying anything, and taking a trip of your dreams is NOT one of them. And yes I mean buying anything, even a home. Given the high cost of homes and the low interest rates being offered today it's far better to borrow and pay that then take a distribution.
2007-01-22 19:25:58 · answer #2 · answered by digdowndeepnseattle 6 · 0⤊ 0⤋
If U close it be prepared they tax U on the money plus they fine U for an early withdrawel but yes you it goes as earned income for that year cause U didn't take it out yet.Good Luck
2007-01-22 19:25:23 · answer #3 · answered by sugarbdp1 6 · 0⤊ 0⤋
Any funds that you withdraw from you 401 will be counted as income unless you roll it over into an IRA or some other tax deferred acct.
2007-01-22 19:28:28 · answer #4 · answered by Anonymous · 0⤊ 0⤋
yes you will pay a 10% early withdrawal fee and pay taxes on the rest as income....
Would not recommend it
2007-01-22 19:19:02 · answer #5 · answered by Anonymous · 0⤊ 0⤋