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Wallstreet Esq.
Wallstreet Esq., Tax Attorney
Category: Tax
Satisfied Customers: 586
Experience:  10 years experience
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This last year I purchased a home (my first), but to do so I

Customer Question

Hello. This last year I purchased a home (my first), but to do so I had to make an early withdraw from my 401(k) plan. I now owe $24,500 in state and federal tax. Can you help lower my tax bill? I do not want an installment plan looming over my head. Please advise
JA: The Accountant will know how to help. Is there anything else important you think the Accountant should know?
Customer: I just now turned 59 and a half, and my income is moderate.
Submitted: 7 months ago.
Category: Tax
Expert:  Barbara replied 7 months ago.

Welcome to Just Answer. My name is ***** ***** I will be happy to assist you.

Unfortunately, there is no way to lessen your tax liability.

If your 401K plan permitted it, you could have taken a LOAN from your 401K and it would not have been counted as a distribution. You would have paid the loan back through your wages, and it would have only been considered a distribution if you defaulted on the repayment.

I wish I had better news to give you.

Thank you and best regards,