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Reply to "I need to cash out my 401k"
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[quote=Anonymous][quote]So I called the Plan again today and they said stated that my balance was 12599. If I cash it out, they will retain 20% for federal taxes and 4% for Va state taxes and at the end of the year I will have to pay more if the IRS decides that it wasn't enough or get some money back if it was too much. I am really torn about this decision. On one hand I feel like it would be so easy to just cash this out and pay off my debt. On another, I am not totally sure it's the right decision [/quote] They will take 10% off the top(IRS early withdraw penalty), 20% is the federal taxes you have not paid on the money(it depends on your rate, could be higher), 4% is state and I think you will have to paid ss and med as it will be counted as income for the year. The 12k could push you in to a higher bracket and you may owe more money next year in taxes.[/quote]
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