How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Lane Your Own Question
Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 11813
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
1929974
Type Your Tax Question Here...
Lane is online now
A new question is answered every 9 seconds

I have a question regarding my 401k distribution, I had a

Customer Question

Good Morning, I have a question regarding my 401k distribution
JA: The Accountant will know how to help. Please tell me more, so we can help you best.
Customer: I had a loan out on my 401k I ended up leaving my job of 14 yrs. I know that I am going to have some issues come tax time. I have not found an other job yet I'm worried about taxes. I don't have any income at all
JA: Is there anything else the Accountant should be aware of?
Customer: I would like to know if it's possible for me to take any other funds from my 401k since I do not have an income currently and I've used all other assets
Submitted: 8 months ago.
Category: Tax
Expert:  Lane replied 8 months ago.

Hi ... My name's Lane ... I can help here

...

So sorry to hear of the difficulty.

...

First the loan, as it looks like you know, will be treated as a distribution and added to your other taxable income for the year you left withough repaying the loan.

...

If it happens that you left after turing age 55 (age 59 and 1/2 for IRA's but age 55 for qualified plans if you've separated service) there will NOT be the additional 10% penalty tax.

...

But yes, once you've left the company you can take distributions form the plan ... this amount, however, would ALSO be added to yoiur income for the year taken out.

...

What you MIGHT want to consider is waiting until after Dec 31st to take a distribution if you can so that some of the money wouldn't be taxable until it's time to do 2017 taxes in April of 2018.

...

The other side of that coin is that if you end up with a lower income this tax year, becasue, say, you get a job before the end of the year and worked all of next year then that distribution income may actually be taxed at a lower rate if you take it all (whatever amount you're going to take) this year.

...

But yes once you've "separated from service," as IRS and DOL put it, you cna take distributions from the 401(k)

Expert:  Lane replied 8 months ago.

Please let me know if you have any questions at all, before rating me

...

If this HAS helped, and you DON’T have other questions … I'd appreciate a positive rating (using the stars or faces on your screen, and then clicking “submit") ... Otherwise I receive no compensation from JustAnswer for the work here.

...

Thank you!

Lane

I hold a law degree, with concentration in Tax Law, Estate law & Corporate law, an MBA, with specialization in financial accounting & tax, a BBA, and CFP & CRPS designations, as well - I’ve been providing financial, Social Security/Medicare, estate, corporate, non-profit, and tax advice, since 1986.

Expert:  Lane replied 8 months ago.

Hi,

...

I’m just checking back in to see how things are going.

...

Did my answer help?

If this HAS helped, and you DON’T have other questions … I'd appreciate a positive rating (using the stars or faces on your screen, and then clicking “submit")

...

But again, let me know if you need more here.

Lane