I need money fast how can i get it from my 401k without a wack from the tax man?

Answer 1

You can borrow it from your 401(K), but then you will pay a 10% tax penalty, plus if you don't pay it back by a certain time. You will be tax for ordinary income. If you leave your job, then the money you borrowed is due, in most cases one lump sum.

Some people don't realize that when you borrow from the 401(K), you are borrowing pre-tax dollars. When you pay back the loan to the 401(K) you are paying back with after tax dollars. When you retire at 59.5 and start withdrawing, you're going to get taxed again!

In a simple terms, you might as well get a credit card that charges 40% interest. It makes no financial sense to pull money out of the 401(K).

Answer 2

Check with your plan to see if they allow for loans from the 401k.

A loan from the 401k would not have any tax consequences at all as you have to pay it back.

If you cash it out, you are going to get "wacked" for taxes. No way around that.

Answer 3

you will take a hit from the tax man if you take mone from your 401 before age like 60.

However if you have losses, like from a business those taxes can be reduced drastically. It may work out better for some people than getting a high interest loan from a credit card.

Answer 4

You should be able to borrow against it without touching the principal at all. If you are able to do so, there shouldn't be any kind of tax penalty.