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Author: TMFTaxes Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121189  
Subject: Re: Moving Date: 9/7/2000 6:52 PM
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<<I will be moving from NJ to NC toward the end of October. When I leave my job I will have a sum of money from my profit sharing plan. The question is what are my option to do with this money. I believe that if I just take the cash I will have to pay a 10% penalty plus I will have to pay income tax on the money.

Can I take the money and put it in an IRA?
Do I have any other options?
What other taxes are there that I don't know about?>>

As JAB pointed out, you can certainly transfer the funds from your profit sharing plan to an IRA account. You can then "self-direct" that IRA and control the actual investments in the IRA.

You are also correct that if you take a distribution of the funds, you'll not only pay income taxes but a 10% penalty on (likely) the entire distribution. And you'll (likely) also have to pay state taxes and potentially state penalties. The taxes could be as high as 50% of the distribution depending upon your situation.

You can read more about IRA transfers and rollovers in the Taxes FAQ area.

TMF Taxes

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