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401k disbursement tax question?
Do to the economy we took a withdrawl from our 401k but someone had mentioned that they are making a change on the income tax where maybe we wouldn't get hit that hard with taxes as many people did this. Anyone know anything about this???/
4 Answers
- JssLv 71 decade agoFavorite Answer
Early withdrawal is subject to 10% penalty and entire withdrawal is taxed as ordianry income.
For more information on 401(k), read http://taxipay.blogspot.com/2008/08/elective-defer...
- prescientoneLv 51 decade ago
Do you have loan options on your plan? That would be the way to go. If it is for hardship, you may be able to avoid the 10% penalty for early withdrawal
- StilwaterLv 41 decade ago
As far as I can tell the idea of suspending penalties on withdrawals is still up for debate
- 1 decade ago
the money that you took out of your 401 k will be taxable income if you took it out just to help make ends meet.however,the standard deduction and personal exemption have increased for 2008.so that will help to reduce your taxable income.
Source(s): professional tax preparer
