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MequonCPA
MequonCPA, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 2342
Experience:  CPA, Over 30 yrs experience w/individuals and small businesses. Masters in Tax.
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Does the spouse withdrawing money from a 401K or 457 account,

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Does the spouse withdrawing money from a 401K or 457 account, do they have to pay taxes on the money for a divorce settlement of $300,000.
Hi and welcome to JustAnswer:

Any withdrawal from a tax deferred retirement account is taxable income. However, it is possible that the withdrawal may be exempt from the 10% early withdrawal penalty.

It is possible that instead of a withdrawal, the amounts can be rolled over into an IRA and continue to be tax deferred.
Customer: replied 3 years ago.

His income is $100,000, what would his taxes be on a $300,000 withdrawal?

Please expand on the situation. Has this already happened? Is he making the withdrawal to pay you? Will you receive the net? Do you need the funds currently or could you contribute them to an IRA.
Customer: replied 3 years ago.

It has not happened yet. The withdrawal would be too me as a settlement. I would need to buy a condo.

Are you receiving it net after tax or are you receiving $300K
Customer: replied 3 years ago.

I would be receiving $300,000 and there is no tax for me

Is he over 59 1/2?
Customer: replied 3 years ago.

He is 63

His combined federal & CA tax will be approximately $126K on a withdrawal of $300K.
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