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Started By
Message
Wife has 15k in a 401k from a previous job.. TAX question
Posted on 10/23/13 at 6:19 pm
Posted on 10/23/13 at 6:19 pm
We'd like to apply that money towards the house we getting ready to build..
Is there any special IRS tax and or early withrdawal penaties that can be avoided for this money being as its being applied to purchase/building of a home?
Just wondering if there's a way that we can avoid the 10% early withdrawl and 20 plus % tax burden.
TIA.
Is there any special IRS tax and or early withrdawal penaties that can be avoided for this money being as its being applied to purchase/building of a home?
Just wondering if there's a way that we can avoid the 10% early withdrawl and 20 plus % tax burden.
TIA.
3
Posted on 10/23/13 at 6:21 pm to TIGRLEE
quote:
Is there any special IRS tax and or early withrdawal penaties that can be avoided for this money being as its being applied to purchase/building of a home?
I think there are some stipulations for the purchase of a home, but Im not the one to answer that. I also think you can loan yourself the money out of it, you just have to put it back within a few years.
Posted on 10/23/13 at 6:33 pm to Lsut81
quote:
I think there are some stipulations for the purchase of a home, but Im not the one to answer that. I also think you can loan yourself the money out of it, you just have to put it back within a few years.
I think you lose the option to loan the money once you are not working at the job where you got the 401k.
Similarly, the entire owed amount becomes due if you lose your job.
Posted on 10/23/13 at 6:41 pm to TIGRLEE
You'll have to rollover the 401k to an IRA.
Then you can pull 10k penalty free (but not tax free) towards your home.
If you currently live in a home, you do not get this penalty break.
Then you can pull 10k penalty free (but not tax free) towards your home.
If you currently live in a home, you do not get this penalty break.
Posted on 10/24/13 at 9:28 am to Volvagia
Regardless if its new construction?
Posted on 10/24/13 at 1:09 pm to TIGRLEE
quote:
Regardless if its new construction?
Goes to first time home buyers only.
Posted on 10/24/13 at 4:21 pm to fishfighter
Or rather, those who having been living in a home for X number of years.
Posted on 10/25/13 at 12:39 pm to TIGRLEE
I think you'd need to prove to the plan administrator that this is a "hardship". I've seen early withdrawals labeled as "hardships" not penalized because of mortgage or bill payment needs.
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