Whats up my fastlane homies
... My question is how can I help a family member cash out there 401K??
Without paying or very minimal I mean very minimal taxes....please help guide me to help..
My mother recently lost her job after 18yrs. The reason I know most of you would not care. Or so I irrationaly reason. Her place of employment burnt down displacing over 300 workers. She would like to take some time off now and cash out her employee savings plan.
In order for her to cash out we have been told by our tax preparer ( I know wrong guy to go to for these type of things) that because she is not over the age of 59 1/2.
She will have to pay a 10% penalty fee. Plus the feds want 35 to 40% tax and in the state she resides they want 5 to 10%. I did some research and turns out he is right
From what I have been able to find out these are tax deferred plans. But wow go easy on the nuggets! This is robbery. For some folks different strokes. What do I mean by this; some people would say " Hey why not just leave it there and build interest". Unfortunately right now the second option is to "cash out" the 401K...
There is options of taking out "hardship loans"..not happening. Also for the downpayment of real estate or medical purposes..this is also not happening.
Hope to hear from some of you intelligent and savvy individuals that deal with this on a daily basis. And whatever golden nuggets of information are left. I thank you and will make sure to turn this milk situation into butter.
Muchas Gracias
... My question is how can I help a family member cash out there 401K??Without paying or very minimal I mean very minimal taxes....please help guide me to help..
My mother recently lost her job after 18yrs. The reason I know most of you would not care. Or so I irrationaly reason. Her place of employment burnt down displacing over 300 workers. She would like to take some time off now and cash out her employee savings plan.
In order for her to cash out we have been told by our tax preparer ( I know wrong guy to go to for these type of things) that because she is not over the age of 59 1/2.
She will have to pay a 10% penalty fee. Plus the feds want 35 to 40% tax and in the state she resides they want 5 to 10%. I did some research and turns out he is right
From what I have been able to find out these are tax deferred plans. But wow go easy on the nuggets! This is robbery. For some folks different strokes. What do I mean by this; some people would say " Hey why not just leave it there and build interest". Unfortunately right now the second option is to "cash out" the 401K...
There is options of taking out "hardship loans"..not happening. Also for the downpayment of real estate or medical purposes..this is also not happening.
Hope to hear from some of you intelligent and savvy individuals that deal with this on a daily basis. And whatever golden nuggets of information are left. I thank you and will make sure to turn this milk situation into butter.
Muchas Gracias
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