Finance Questions? Ask a Financial Expert for Answers ASAP
Hello, and welcome to JustAnswer.com. How are you today?
I am sorry to hear about your situation. I realize that you are wondering what your tax would be on the $35,000 loan that you took from your retirement fund, if you are separated from your employment.
I hate to be the bearer of bad news but you are under 59 1/2, so you cannot take penalty free withdrawals from your retirement accounts
You would be subject to the 10% penalty
You are also subject to income tax on that amount. So, you will owe ordinary income tax on the outstanding balance of the loan.
If you tell me more about your situation, I can more accurately calculate your income tax liability
What is your filing status? What is your other income? How many dependents do you have?
Let's say for instance you are in the 15% tax bracket. You would owe $3,500 as a penalty and $5,250 as income tax.
If you are in the 25% bracket, you would owe $3,500 as a penalty and $8,750 as taxes.
I can't tell you an exact amount without knowing your tax situation.
Do you mean 15% or 28%? There is no 18% bracket.
Okay. If you took out $310,000 that would push you into a higher tax bracket for sure. What is your other income the year of the disbursement
okay. If you are married, with 4 dependents and have $115,000 of income from wages, then $345,000 of 401(k) withdrawal your tax would be $124,950
Your marginal tax rate would be 35%
I'm sorry it's so much.
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