Have a Tax Question? Ask a Tax Expert
Hi, my name is Mark. I will be happy to help you with your question. Are you wondering what the tax implications will be if you take a 401k distribution? Are you younger than 59 1/2?
You could roll over the 401K into a IRA plan. How much is the balance? How much will be your other income for the year?
Are you married?
You are in the 15% tax bracket. So the $1500 will be taxed at 15% ($225). There is also an early distribution penalty of 10% ($150). So the federal taxes would be $375. What state are you in?
There is another 5.5% tax at the state level so another $82 or so. So a total tax burden of just over $450. You could open an IRA and roll this into the account and avoid paying the tax.
You would need to complete a distribution. You would obtain this from your 401-k provider.
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There is a distribution form that your 401k provider will provide to you. This needs to be completed to request a distribution.