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Get your taxes done using TurboTax
Yes. You will have to pay ordinary income taxes on the distribution. You are correct, there is not a penalty, just your regular income tax. There is not a way to avoid that if you want to take the money out to pay off debt.
The best thing to do is to compare your taxes that you will pay on the amount you take out to the interest you will be saving.
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March 25, 2025
10:54 AM