Your CPA was either trippin or you misunderstood him/her.
Upon your withdrawal from a 401k, you’re taxed at your ordinary tax rate. The 10% penalty is added on top of that. If your contributions to your 401k have been Roth (post-tax), then your withdrawal is tax-free and all you have to worry about is the 10% penalty.
There’s also a rarely discussed option to borrow from your 401k for certain life events, like the purchase of your first home. However, doing so is usually not ideal because you have to pay to pay yourself back AND you’re double taxed on that interest.
You’re probably confusing your rates. 35% is the frequently cited rate at which you pay taxes upon withdrawal from 401k, but this assumes that you’re making like $150,000 a year since the rates stair step up based on how much you make.
Sorry for invalidating your whole piece. Good writing though.
FYI, that “massive penalty” is 10%. As your friendly neighborhood CPA, I can recommend saving Roth for retirement so that you’re not 65 and working at Walmart.
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Just the earnings are taxable during early withdrawal. Any Roth contributions are not going to be taxed.
Your CPA was either trippin or you misunderstood him/her.
Upon your withdrawal from a 401k, you’re taxed at your ordinary tax rate. The 10% penalty is added on top of that. If your contributions to your 401k have been Roth (post-tax), then your withdrawal is tax-free and all you have to worry about is the 10% penalty.
There’s also a rarely discussed option to borrow from your 401k for certain life events, like the purchase of your first home. However, doing so is usually not ideal because you have to pay to pay yourself back AND you’re double taxed on that interest.
True but it’s not a guaranteed penalty, more of a worse case “what if?” scenario.
http://lmgtfy.com/?q=What+is+the+401k+early+withdrawal+penalty
You’re probably confusing your rates. 35% is the frequently cited rate at which you pay taxes upon withdrawal from 401k, but this assumes that you’re making like $150,000 a year since the rates stair step up based on how much you make.
Sorry for invalidating your whole piece. Good writing though.
The correct answer would’ve been “you are what you eat.”
FYI, that “massive penalty” is 10%. As your friendly neighborhood CPA, I can recommend saving Roth for retirement so that you’re not 65 and working at Walmart.
Congrats! And fuck USC!
Chinese food from a local Michelin recommended Szechuan place.
My cousin once told me that the best way to get over someone is to get under someone else. Truer words were never spoken.
I was actually planning on getting an ahi bowl for lunch today but now…fuck that. Turkey sandwich it is.
Been using it for years now, just figured vlookup is known more.
That makes two of us. Those vlookups sure are delicious.
This is the joke: ——-
This is your head: ——
You might want to rethink said relationship.
Mediterranean. Lamb gyros with a hummus and dolma appetizer plate.
No offense but she doesn’t sound like much of a catch based on what you’ve posted about her.
Congrats on the (hopefully) sex.
More moving Saturday, working Sunday. This weekend will not be fun.
Sriracha or bust.