Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (2) | Ignore Thread Prev Thread | Next Thread
Author: Reflect Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121599  
Subject: 401K Distribution to Pay Student Loans Date: 12/17/2001 1:40 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
Fools,

I'm posting this independently of the prior message. I'm considering taking a hardship distribution from my 401K to pay delinquent student loans. Does anyone have any input concerning the tax implications of this move? I know that next year I'll be able to deduct the interest and I'm aware that I'll be taxed on the distribution as regular income. Also, does anyone know if I can be exempted from the 10% penalty?

Regards,

Reflect
Print the post Back To Top
Author: pmarti Big funky green star, 20000 posts Home Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 56085 of 121599
Subject: Re: 401K Distribution to Pay Student Loans Date: 12/17/2001 8:31 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 1
I'm considering taking a hardship distribution from my 401K to pay delinquent student loans. Does anyone have any input concerning the tax implications of this move? I know that next year I'll be able to deduct the interest and I'm aware that I'll be taxed on the distribution as regular income. Also, does anyone know if I can be exempted from the 10% penalty?

No, you will not be exempt from the 10% premature distribution penalty. See IRS Publication 575.

Phil Marti
VITA Volunteer

Print the post Back To Top
UnThreaded | Threaded | Whole Thread (2) | Ignore Thread Prev Thread | Next Thread
Advertisement