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I cashed out a $57k 401k and got a $47k direct deposit. What was taken out and what do I still owe? I live in a state of 20 percent income tax.
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I cashed out a $57k 401k and got a $47k direct deposit. What was taken out and what do I still owe? I live in a state of 20 percent income tax.
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I cashed out a $57k 401k and got a $47k direct deposit. What was taken out and what do I still owe? I live in a state of 20 percent income tax.
Well, it looks like 10K was withheld to pay federal and state income taxes, or approximately 17.5% of the withdrawal. You will owe ordinary income taxes at your marginal federal and state income tax rates on the 57K withdrawal, unless some or all of that withdrawal is exempt from tax (highly unlikely). Generally, unless you were over 59 1/2 at the time you made the withdrawal, you will owe a federal tax penalty of 10% on the withdrawal as well. The following shows the exceptions to the 10% early withdrawal penalty:
Finally, since the withdrawal will be added to your taxable income, you may have "second order effects" as well - reduction or elimination of certain deductions or credits on your tax return, a higher tax rate on capital gains, etc. Nobody on the internet can tell you the exact increase in your taxes that result from the withdrawal without much more detailed information.
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I cashed out a $57k 401k and got a $47k direct deposit. What was taken out and what do I still owe? I live in a state of 20 percent income tax.
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