penalty question

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Author	Comment
jfbroede	penalty question	Lead	[-]
Posts: 1 (04/29/09 11:37:28) Reply Quote More My Recent Posts Message Me Connection Blocking Invite Ignore User's Posts	Ok, I need some advice. I took a 13k loan from my 401k last year. I have been paying it back while also still contributing. I got laid off in Jan 09. Balance of loan is 10k. It defaults in 1 month. I have 23k in the 401k right now. I cannot pay off the entire 10k loan balance. What will my penalties and taxes amount to. I am in the 15% tax bracket. Would it help to puu like 2-3k towards the balance before the default? Thanks!
ralexander		#1	[-]
Posts: 74 (04/29/09 11:58:06) Reply Quote More My Recent Posts Message Me Connection Blocking Invite Ignore User's Posts	It would help to put anything you can afford into the balance strictly because of the 10% penalty in your case. Penalty = 10%; on $10,000 balance = $1,000 Taxes = 15%; on $10,000 balance = $1,500 All of this would be owed at the end of the year, so that's a big factor, too. Be sure to have the extra money to pay what I can pretty much guarantee to be a hefty tax bill. R. Alexander lowcost401k.com

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