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Ask Mark Taylor Your Own Question
Mark Taylor
Mark Taylor, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 2061
Experience:  Certified Public Accountant
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I quit my job and I want to take mf, my 401k as a

Customer Question

I quit my job and I want to take mf
JA: Because employment law varies from place to place, can you tell me what state this is in?
Customer: my 401k as a distribution *
JA: Has anything been filed or reported?
Customer: No
JA: Anything else you want the lawyer to know before I connect you?
Customer: No
Submitted: 10 months ago.
Category: Tax
Expert:  Mark Taylor replied 10 months ago.

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?

Customer: replied 10 months ago.
I quit that job and my current one does not give me the option to contribute to a retirement plan. I want to take the balance
Expert:  Mark Taylor replied 10 months ago.

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?

Customer: replied 10 months ago.
The balance is under $1500. Current job is part time, less than $30k annually
Expert:  Mark Taylor replied 10 months ago.

Are you married?

Customer: replied 10 months ago.
No
Expert:  Mark Taylor replied 10 months ago.

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?

Customer: replied 10 months ago.
Missouri
Customer: replied 10 months ago.
What steps do I take to cash out?
Expert:  Mark Taylor replied 10 months ago.

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.

Expert:  Mark Taylor replied 10 months ago.

You would need to complete a distribution. You would obtain this from your 401-k provider.

I hope you found this information to be beneficial. If this answered your question please take a few moments to rate my response. A rating is needed in order for me to receive credit for helping you today. The rating bar is located at the top of the page – ranging from 1 to 5 stars. If you need me to clarify aspect of my response or if there are additional areas of the question that you would like me to consider please let me know. I would be happy to continue the discussion. It has been my pleasure helping you today.

Expert:  Mark Taylor replied 10 months ago.

There is a distribution form that your 401k provider will provide to you. This needs to be completed to request a distribution.