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Taxes on 401K Withdrawals


JeanLorie
Rep Points: 545
My daughter lost her job and is planning to use her 401K to cover expenses while she looks for work.  I am thinking she is going to have to pay a large sum in taxes on this 401K money, but she does not agree with me and says the money was withheld when she got the proceeds.  Is this a common practice, or is it possible that what was withheld is actually a penalty fee, and she will still owe taxes? 

xs5
Rep Points: 10
401K is not a good way to get rid of such problems I think you should advice her to stop from doing this.

xs5
Rep Points: 10
There are other many ways to cope with htis problem such as sui the company.