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Old 12-22-2008, 02:22 PM
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401K help Please!

I need to know the percentage to turn in to withdraw my 401K, so that I don't owe the penalty come tax time in 2010. I know they withdraw the 20% up front, but how do I get the amount down to a science? It will be in the low 40K range, with no other income or state taxes due for that year. Please help!



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Old 12-22-2008, 02:39 PM
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I need to know before the end of this year, so I can have the money early in 2009. Thank you for any help you can give me. I am desperate.



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Old 12-23-2008, 02:10 AM
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Generally speaking, a premature withdrawal from a 401k pension plan will result in

1. a 10% early withdrawal penalty, and,

2. subjecting the entire distribution to your ordinary income tax rate.

Thus, you should attempt to withhold an amount equal to the sum of 10% plus your ordinary tax rate which I would assume would be around 25%.

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Old 01-29-2009, 06:38 PM
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Not informed

I didn't know that if I was found disabled, I would get all of my 401K. I rec. my 401K 4 days prior to the hearing. I happened to mention to my lawyer that I had withdrawn my money from the 401K to survive and he said I should have waited to see if I won my case. Now that I have won, my question is, can I get the taxes and penalty back when I file my 2009 taxes?? Or am I just out around 15K ?
If it weren't for bad luck, I'd have no luck at all. Thank you to whoever can advise me.



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Old 01-30-2009, 01:11 PM
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TYPICALLY you would not have to pay the 10% penalty, however, taxes still need to be paid.



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Old 01-30-2009, 10:27 PM
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Thanks j20a00g! You are right! A "disability would qualify a taxpayer to avoid the 10% early withdrawal penalty under point 1) of the exceptions to the penalties rules." Please refer to the link below.

How one can avoid the 10% penalty for early withdrawal of funds from an IRA?

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