The Motley Fool Discussion Boards

Previous Page

Financial Planning / Tax Strategies


Subject:  Re: 401K Distribution to Pay Student Loans Date:  12/17/2001  8:31 PM
Author:  pmarti Number:  56085 of 127613

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
Copyright 1996-2018 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us