Reply With QuoteYou must repay tax in the calendar year. They'll take it out of your payments into your account. Well that's what I think they do, I've never done it and have not read the info in a while.
Is there any downside to making a nonhardship withdrawal from your 401k? I've got some things coming up that I need to pay for/have extra money to be safe. Does it get taxed right away so I don't have to worry about it come tax time next year?
"Remember, not knowing how to cook is like not knowing how to fuck."
Geek in the Desert
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You must repay tax in the calendar year. They'll take it out of your payments into your account. Well that's what I think they do, I've never done it and have not read the info in a while.
Last edited by Othello Harrington; 28 Jul 2008 at 08:55 PM.
Don't do it unless you absolutely positively have to. Probably better to call your investment firm to see what kind of tax liability/penalty....
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Yes that, same thing I PM'd you. Your HR will have the exact details of what it will cost. Also, the mailings you get every month that you throw away probably do too.
13th Monkey
seriously man, dont do it, you will regret it down the line
Ha ha
Check with your company to see if you can borrow against your 401(k). I know people who have done it, avoids all that ordinary tax + additional tax + potentially kicking you up a bracket bullshit.Originally Posted by Hot Like Wasabi
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But doesn't borrowing from 401k mean that he won't be getting matched by his employer until he repays he debt?
Ha ha
Not sure, never done it, but he should check with HR/payroll and run a cost-benefit analysis to see what makes sense.
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Cool, we are on the same page then.
Ha ha
In case HLW was wondering, I believe the impact of early withdrawal is:
1) taxed at ordinary (non-capital gains) income tax rate
2) addtional 10% tax penalty levied for early withdrawal
3) could kick you up a tax bracket depending on where you stand
I'm not a tax planner but I'm fairly confident these are the consequences of early withdrawal.
I'm not sure if you can mitigate this by subsequently contributing to an IRA (non-Roth) and having that deducted from your AGI.
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