How much do I have to pay in taxes if i took money out of 401K?

Question

I recently withdrew some money out of my 401K.
I paid the 10% federal penalty fee for early distribution.
How much more do I have to pay once i file my tax return? (I was told 25% in total, but how much in total does one have to pay the government when 1000 Dollars were withdrawn?)

Answer 1

You pay a penalty of 10% or so then the normal taxes. Say if you took out 1000 Dollars you are charged a penalty then its taxed as if it was your paycheck.

Answer 2

DO NOT DO IT! $4500 in credit card debt can be paid off in 12 to 18 months by taking a second job at minimum wage working 15 hours a week. $90 a week gross, say $80 clear, put that $80 against your debt AS SOON AS YOU GET PAID. It reduces the principal faster and saves you a lot of interest cost. You will be putting about $350 a month (4.33 weeks per month) and in 18 months that adds up to $6300. At 20% interest, your $4500 would become $5400 in a year if you paid nothing, and you won't be paying nothing. You'll have this debt cleared up quickly, and even sooner if you can do better than minimum or work more hours. Life won't be as fun, but that's one of the consequences of living higher than you can afford to. Pay the tax on that extra income instead of paying the tax and penalties on the 401K money. And, besides having to pay that big chunk of tax all in one year (plus the 10% penalty), you'll be losing the future investment potential, all tax-deferred, on that money if you take it out now. That $4500, at age 28, left until you're 58, will turn into a huge sum of money. It may not look that way this minute, but the market should have no problem returning 7% a year over the next ten years. At that rate, your money will double. Over 30 years, it will have doubled again, and then again. How does $36K sound, just on the $4500 you leave alone? DO NOT TAKE THE MONEY OUT!

Answer 3

You'll pay regular income tax on the amount withdrawn at whatever your rate is, plus the 10% penalty for early withdrawal if you are under age 59-1/2. If you are in a 15% tax bracket, then that would total 25%.

Answer 4

The 10% penalty is due no matter how much other income you have. If you have no other income, there is no additional tax.

Add your distribution of $1,000 to your other income. The increase in taxes is what you will owe in addition to the penalty. If you are in the 15% bracket, you will owe an additional $150, for a total of $250.

Answer 5

If you are under 59 1/2, taxes as the regular rate for your income level plus 10%

Answer 6

It's 20% not 25. I don't understand how you already paid 10%. I took a withdrawl this year and paid the full 20% at the time I took it out. I'd have a pro do my taxes this year so your sure it's done right.

Answer 7

Early withdrawal is subject to 10% penalty and is taxed as ordinary income so you will pay federal income tax and state income tax (depending upon your state).

However, in some case there is no penalty on early withdrawals.
*If distributions are not more than your qualified higher education expenses
*You have unreimbursed medical expenses that are more than 7.5% of your adjusted gross income.
*You are disabled.
*You use the distributions to buy, build, or rebuild a first home.
*The distribution is due to an IRS levy of the qualified plan. *The distribution is a qualified reservist distribution.

Answer 8

Depends on how much else you file on your tax return. You're going to end up paying federal,state AND self-employment taxes. For me, in all, it's about 47%

NEVER borrow from your 401k!!

Answer 9

Your $1,000 is added to your wages. 401k money was not taxed when contributions to the 401k was made.