If I withdraw from 401 K and Profit Sharing before 59 1/2 in Minnesota, do I have to pay 10% early penalty?
101920
The answer above is not necessarily true, hardship withdrawals are still penalized, just no tax is withheld.  \n\nIn MOST cases, you will have to pay regular income tax and a 10% penalty.  Talk to a qualified tax planner.  By the way, this is federal law, not state.
100244
There is a 10% penalty for early withdrawal if not rolled into another tax-deferred account (i.e., another 401K or an IRA), plus the distribution is taxed as normal income.  The 10% that TaxCut is applying is for the 10% penalty.  The amount of the distribution then gets added into your total income, and the tax depends on whatever tax bracket you are in.  But the withheld amount shown on Box 4 of the 1099R gets counted as prepaid tax, so your total tax+penalties due will be decreased by the amount of tax already withheld at the time of the 401K withdrawal.  In your case, the 10% withheld pays for the 10% penalty, and then you still owe the regular income tax on the amount of the distribution.
1098393
If using hardship withdrawals for other non-house purposes is not allowed by your plan, your action is a violation of IRS regulations.  Here are the possibilities.\n\n1)  You could be asked to immediately repay the $8,000, or possibly just the $4,000.  If you are unable to repay, it can be deducted from your wages.\n\n2)  It could be reported to the IRS as additional untaxed income, causing your taxes to go sky high.\n\n3)  If you are in a position of authority, and you refuse to correct the problem, the plan could be "disqualified", causing taxes on all the plan money for the whole company to become due.  As an alternate, the company may be liable for an initial excise tax of 15% of 4,000, and 100% of 4,000 for every following year unless it's corrected.\n\nDon't mess with your retirement plan.  It's REALLY bad news.
12383
There is a 10% early withdrawal penalty, plus the $5,000 is counted as ordinary income in the calendar year you withdraw it so you will have to pay tax on it.
81277
If your company offers a 401K plan, take advantage of it.  They'll take out a fraction of you paycheck (as lo as 1%) and invest it in a mutual fund.  Many companies match your contribution, so that's like free money.  \n\nIf you just forget about it and just let it grow, you'll soon build up quite a bit of dough.\n\nIt's tax deferred, so that means you won't pay taxes on it until you cash it out.\n\nThe only drawback is you can't cash it out until you're 59 and a half without paying a penalty.
129902
As the other answerer mentioned, there are two\nsituations:\n\n  1) \n     You rolled the 401k over from a previous employer's\n     plan into either your new employer's plan or\n     into a private 401k account (ie. at Fidelity or\n     Ameriprise or something like that).\n\n     In that case, it is not considered a withdrawal\n     and there are no taxes involved.\n\n     As I recall, you have something like 60 days\n     from when you remove it from one plan before\n     it must be placed into another.  Keep your \n     records in case the IRS checks up on you :-)\n\n  2) \n     If you withdrew the money and just kept it in\n     a bank account, you not only have to pay taxes\n     on it, but you'll probably have to pay a \n     penalty as well.
808301
If you scr.w yourself by taking and closing ( to your hands) the 401k .you lose up to 40% of your money before you touch it. Then it can and will be Garnished for the full amount you owe. Can you say ZERO cash?\nLeave the 401k alone until you can open an IRA and directly rollover to it. NEVER touch the money - You lose. BIG Time lol
120957
It just depend what type of 1099 you have. If you worked them you need to do a schedule c and schedule se if you have a gain on your job. If its a pension or a 401k that you took out early you have to figure the additional tax on the plan, which is 10 percent of what you took out.
4641
yup, unless you're 59 and a half, then you will have to pay the full tax on the money taken out of your 401k plan, which means if you are working right now, you are in your income earning years, hence your tax bracket should be higher, maybe even to the next level depending on how much you take out of your 401k, since that would be counted as regular income.  and the IRS (uncle sam calls it a penalty, but I like to call it a tip) would also be needing that tip from you, a 10% tip for every buck you want to take out.  so, if you take 20,000 out, that would be more like 14,400 if your bracket is in the 28% range minus $2000 for that tip i would telling you about, which leaves you 12,400 for taking out 20,000.  not really worth it huh
750454
Unfortunately they rushed to distribute the 401K to your friend. They 20% for the federal tax is withholding required because the check was sent to your friend. You friend will have to report the full amount of the 401K on his 2006 tax return. the withholding will be shown on his return just like withholding from a salary. \nYour friend will receive a 1099R in January reporting this distribution in his social security number.This form has a box labeled distribution code. The code should be the number 4 which is a distribution made because of death. This code keeps your Friend from having to pay the 10% early withdrawal penalty. If the code is wrong your friend will need to contact the company to have the code corrected.
675447
Each company has their own policy.  Some may allow withdrawls starting at age 55 (reduced benefits).  Generally, the only way you'll receive a lump sum is if the company had a policy such that if the net value was below some threshold (depends on the company), they would pay it out as a retirement distribution.  You would then have to put it in an IRA of some sort and cash it out early paying the appropriate penalty.  You'll need to contact the benefits dept of your former company and ask their policy.
341439
You can beginning making withdrawals from an IRA without penalty at age 59 1/2 (you still have to pay regular income taxes, unless it's a Roth IRA).  See the following government publication:\n\nwww.irs.gov/pub/irs-pdf/p590.pdf
896171
Let me make sure I understand the question.  Are you saying you are taking out an early distribution from your IRA of $40,000 and want to shelter all of it from the 10% early distribution penalty?  Well, first of all, you only have $10,000 per person per lifetime of 1st time home buyer's exemption.  Of course, if there are two of you, each can pull out $10,000 from their own IRAs.\n\nIt looks like you are reading Publication 590.  Good.  The phrase that is confusing to most people is "The part not subject to the tax is generally the amount that is not more than the qualified higher education expenses (defined later) for the year...".  What they are saying is that the amount you can exempt for education can not be more than the amount you paid for education.  They are not saying you can't include other exemption items on top of the education exemption items.\n\nSo, if you paid $11,000 for tuition, fees, books, supplies, and equipment regardless if it was from a loan, a gift, or from your own wallet, but not from a scholarship or grant, and if you paid at least $10,000 for a house, and if your medical expenses exceeded 7.5% of your AGI by $2,000 (regardless if you use a Schedule A), then you can pull out $23,000 from your IRA and not be penalized.  Don't forget that even though you avoid the penalty, you will still have to include the amount you pull out as taxable income in the year you pull it out.  There is nothing you can do to avoid that.
828392
It does not matter where you work.  Whatever entity you set up, you will wish to take profits out of the business to live on, right?  In that case, you will have to pay NY taxes becaus that is where you live.  Remember, not all free advice is worth the money!  (Think about it.)\n\nYou should consult with a NY CPA, who will be able to advise you best.  Do not rush to a low-tax jurisdiction without considering the effect on your own personal return.  Ultimately, that is the bottom line.
726416
You will be taxed for taking money out of your IRA plus penalties for early withdraws.
1172090
You'll be subject to a 10% IRS penalty for early withdrawal from your qualified retirement plan, plus whatever penalties the provider of your plan has.\n\nSince interest on a mortgage is deductible, why not continue to carry the mortgage?  I advise against most other debt, but a mortgage, under the current tax laws, still makes sense for maximizing your dollars.\n\nGood question!
406918
It will depend on your age and retirement status when you withdraw. Generally speaking, you will be assessed a penalty equal to 10 percent of the taxable amount of your withdrawal if you withdraw money before you reach age 59 1/2. There are some instances when you may not have to pay a penalty. Keep in mind that you must pay income taxes on all withdrawals of taxable money, \n\nDepending on your plan, you may be eligible for a "hardship withdrawal," for those unexpected circumstances when you may need your money before retirement. According to IRS safe harbor regulations, your "hardship" must represent an "immediate and heavy financial need" and is necessary to satisfy the financial need. Also, there must not be "any other resources that are reasonably available," to you to handle that financial need. The IRS has deemed the following four distribution reasons as representing an immediate and heavy financial need:\n\nCertain medical expenses for you, your spouse or your dependents \nPurchase of a primary residence (excluding mortgage payment) \nPayments of certain post-secondary education expenses for the next year for you, your spouse or your dependents \nTo prevent eviction from or foreclosure on your primary home \n \nPlease be advised that if you take a hardship withdrawal from the plan following "safe harbor" rules, you may be suspended from making contributions to the plan for a minimum of six months.  \n \nSome plans also allow hardship withdrawals for other reasons. Check with your benefits department. You will need to show your employer proof of how you intend to use the money, and proof that the amount you requested isn't more than enough to satisfy your need.  \n \nAs a result of the Economic Growth and Tax Relief Reconciliation Act of 2001, hardship withdrawals are not eligible to be rolled over, and are not subject to a federal income tax withholding. You may still owe income taxes and a possible 10% early withdrawal penalty if you are under 59 1/2 when you file your annual income tax return. State and local taxes may also apply. Please note: You should consult your financial/tax adviser with specific questions about your personal situation if you are considering a withdrawal from your plan account.