I know the spousal support is taxed. But what about approx. $16k from 401k?
2007-02-28 03:23:08 · 5 answers · asked by Anonymous in Business & Finance ➔ Personal Finance
iM NOT CASHING MINE OUT...SHE'S GIVING ME CASH FROM HERS.....
2007-02-28 03:43:21 · update #1
Depends what you do with it.
If you roll it directly into a retirement IRA, I don't think it will be taxed. Can't help you otherwise.
2007-02-28 03:28:30 · answer #1 · answered by lunatic 7 · 0⤊ 0⤋
DON'T DO IT!
I cashed in my 401K last year after getting a new job. I had only $1300 I ended up getting only $845 after the 35% tax. But that wasn't the worst part. The worst part is that when you file your tax return they charge another 10% "Penalty" so it dropped my return significantly. PLUS then the State you live will want a piece and they charge ANOTHER 10%. I will NEVER touch my 401K again.
Do what you want but you will remember this when your getting taxed left and right. Seems like quick money but it is not worth it.
2007-02-28 11:34:16 · answer #2 · answered by Ryan G 1 · 0⤊ 0⤋
If you decide to keep the money there are penalties like you would not believe , plus an additional 10% when you file ..I cashed mine out when I left the department of corrections the grand total was 13,900.00 ,by the time the penalty for early cash out then the taxes plus the additional 10% ..I had about 8,500.00
left ....you would greatly benefit if you roll it over to another retirement plan , most banks can help you pick the right one , then you let it mature for either you or the children , unless you really want to give that much money to our beloved government , who will gladly take it ...Of course ,I am not sure but if it is the X's he cashes it out are you ,or him responsible for the taxes ..if it is him take the money ..JK ......re invest the money , save for tomorrow if you can the economy is not looking too good , things may get rough in a few years better safe than sorry .....
2007-02-28 11:37:54 · answer #3 · answered by Insensitively Honest 5 · 0⤊ 0⤋
You won't get taxed until the end of the year and then you will be taxed. Although you do get an early withdraw penality if you are not at least 59and1/2 but your ex will be the one that has to worry about that since he/she is the one taking it out of his/her 401k. Sometimes they have the option of paying taxes on it when it is withdrawn. you could go to irs.gov for more information on that subject Now on being taxes on spousal support you can still get allot of information on irs.gov site good luck
2007-02-28 11:53:44 · answer #4 · answered by Anonymous · 0⤊ 0⤋
If she's giving you ANYTHING, its taxed as an income for you. She would also be paying penalties if this is an early withdrawal for her.
Put away atleast $4K of that for tax time, unless you normally get a large return.
2007-02-28 13:56:12 · answer #5 · answered by Anonymous · 0⤊ 0⤋