+ Reply to Thread
Results 1 to 3 of 3
  1. #1
    jinuj Guest

    Withdrawal from 401K

    I work for a US corporation. If I leave the company in January, do not take up a job for the rest of the year and decide to cash out the monies in 401K will I be taxed for the amount upfront or will it just be added to the annual income for 2002 filing? I understand that there will be the penalty for early withdrawal(10%). If the 401K amount gets added to the annual income, I might not pay much tax since the annual income becomes just the 401K amount + January salary.
  2. #2
    ShyCat is offline Senior Member
    Join Date
    Nov 2000
    Posts
    1,559
    The 401(k) administrator will withhold 20% of your withdrawal for Federal income tax. When you file your 2002 tax return, the entire withdrawal amount will taxable income. The 10% penalty will be added to your total tax liability. Subtract the withheld amount (same as payroll withholding) and you either owe or receive a refund.
  3. #3
    jinuj Guest

    Thank you, Shycat

    Thank you, Shycat

Similar Threads

  1. HELP...401k early withdrawal ??'s
    By CITYGIRL811 in forum Tax Law
    Replies: 0
    Last Post: 04-09-2006, 02:12 PM
  2. Withdrawal of 401k
    By art31866 in forum Fringe Benefits
    Replies: 1
    Last Post: 09-16-2005, 07:00 AM
  3. 401K Withdrawal
    By mapleleaf in forum Tax Law
    Replies: 4
    Last Post: 10-15-2004, 11:16 AM
  4. 401k withdrawal
    By moogle in forum Brokers & Investments
    Replies: 2
    Last Post: 03-08-2003, 06:06 AM
  5. 401k withdrawal
    By tobrenda in forum Tax Law
    Replies: 3
    Last Post: 09-25-2002, 01:25 PM

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •  

© 1995-2012 Advice Company, All Rights Reserved

FreeAdvice® has been providing millions of consumers with outstanding advice, free, since 1995. While not a substitute for personal advice from a licensed professional, it is available AS IS, subject to our Disclaimer and Terms & Conditions Of Use.