You will never be able to withdraw the deferred compensation amounts from the 401K with out having to pay the federal and state income taxes that will be due when you take any distribution amounts from your 401K plan.
The difference between a Roth 401k and a regular 401k is that the Roth 401K is a after-tax contribution and the regular 401K is a pre-tax contribution. You pay taxes on the Roth 401K now in order to avoid taxes at withdrawal. The regular 401 is a tax credit for the year deposited with taxes paid at the time of withdrawal.
A good tax consequence of a 401k retirement plan is that you can literally save money as the funds that are ususally tax-free. If you withdraw from your 401k plan, there is usually a large penalty.
A 401k and a IRA are different. A 401k is a employer sponsored plan while a IRA is not. A Roth grows tax free, while a 401k is taxed when you withdrawl the funds.
Yes. But, in each case you would pay the penalty and tax on the withdrawal as income that year.
What ever your marginal rate will after you have completed you income tax return correctly. Could be any where from the -0- % to the maximum 35% tax bracket amount.
The difference between a Roth 401k and a regular 401k is that the Roth 401K is a after-tax contribution and the regular 401K is a pre-tax contribution. You pay taxes on the Roth 401K now in order to avoid taxes at withdrawal. The regular 401 is a tax credit for the year deposited with taxes paid at the time of withdrawal.
The withdrawal will be taxed at the rate determined by your entire taxable income, including the withdrawal. If the early withdrawal has no exceptions, it will incur an additional penalty tax of 10%.
If you withdraw money from your 401k plan, it will be taxed just like any other income. So, the amount that you will pay will depend on what tax bracket the withdrawal pushes you into. If you do not meet one of the exceptions, you will also be subject to a 10% early withdrawal penalty. This penalty is charged by the IRS and it is reported on your tax return for the year of the withdrawal. So, if you are in a 25% tax bracket and you are subject to the early withdrawal penalty, you are going to pay a total of 35% of the withdrawal in Federal income tax. If you live in a State that has state income tax, remember that you will need to pay that too.
A good tax consequence of a 401k retirement plan is that you can literally save money as the funds that are ususally tax-free. If you withdraw from your 401k plan, there is usually a large penalty.
A 401k and a IRA are different. A 401k is a employer sponsored plan while a IRA is not. A Roth grows tax free, while a 401k is taxed when you withdrawl the funds.
Yes. But, in each case you would pay the penalty and tax on the withdrawal as income that year.
Call your local tax filers and ask them. They are the best resources when trying to find out how you can qualify for the free income tax return. That is your best bet.
What ever your marginal rate will after you have completed you income tax return correctly. Could be any where from the -0- % to the maximum 35% tax bracket amount.
Contributions are added after tax and so allows the account to grow tax free. The roth 401k also allows tax free withdrawals, providing the account has been held for at least 5 years and the holder is aged over 55 1/2.
The penalty is 10%. All in all you will pay your tax bracket + 10%. Actually that is incorrect. The question was about a 401k loan. There are no taxes on 401k loans unless you default on the loan. If the loan defaults then yes you would owe 10% penalty plus Federal and State taxes at tax time.
No one can take your qualified pension. However if you took a loan against it, and you don't pay back the loan, the pension/401k is lost. Moreover, it is considered a withdrawal (if it is a 401k) and you get hit with early withdrawal penalty and the tax on the income too.
Having a 401k with ING enables you to borrow money from ING using your 401k savings as collateral. You still recieve the other benefits of a 401k such as defered tax free savings.