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Do you have to pay taxes on a 401k if you take the money out to reinvest in a home?

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Because the money in your 401(k) has never been subject to income tax, all withdrawals for any reason will be taxed as ordinary income. Furthermore, if you take a premature (generally, under age 59 1/2) distribution from your 401(k) to purchase a home, the distribution will additionally be subject to a 10% penalty tax. You make take an early distribution of up to $10,000 from an IRA to pay qualified acquisition costs to purchase, build, or rebuild a first home without incurring the 10% penalty tax. The distribution will still be subject to income tax. http://www.irs.gov/publications/p590/ch01.html#d0e8323 First Time Home Buyer Tax Credit If you purchased a home for your principal residence after April 8, 2008 and before July 1, 2009, you may be eligible for a First Time Home Buyer Tax Credit of up to $7,500 for your 2008 tax return. To be eligible for the credit, you must not have owned a home as a principal residence in the previous 3 years. http://www.efile.com/tax-deduction/income-deduction/home-deductions.asp
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Is it best to put money into 401K and pay taxes at earned income rates or pay taxes up front and pay capital gains and dividend rates?

There are a few different ways to answer this question. * First, it matters whether or not your employer matches any of your 401(k) contributions. Ninety percent of employers

Can you take your 401k and invest it in your home tax free?

NO. The taxable amount of any distributions from your 401K will be added to all of your worldwide gross income and be subject to the federal income tax at your marginal tax ra

Can you borrow money against your 401k if you are in bankruptcy to pay off your taxes?


Do you pay taxes on 401k?

Generally, your contributions aren't taxed (put in before taxes), and your withdrawals are taxed.

How old do you have to be to take money out of 401k?

You can take money out of a 401k if you leave the company, your employer dissolves the plan, you qualify for a limited number of hardship exceptions, or you reach the "retirem

Do you pay taxes on 401k withholdings?

By withholding I will guess that you mean the amounts that you are contributing to your 401K BEFORE income taxes (deferred compensation amount) that will not be subject to the

When you sell a home do you pay taxes on that money?

There is a tax on the amount of profit you make on the sale of a home - sale price less the original purchase price. However there are some exemption rules if the home is your

Would you ever recommend someone to take money out of their 401k and use it to pay down their mortgage and if so is this allowable as a hardship and what tax implications would apply?

You should make an appointment with your tax accountant or a financial advisor who can review your economic status and then apply expert advice. You should make an appointmen