What are the penalties for cashing out my 401k?

I want to pay off debt, and start my own business. I do not want to take out a loan.

The company that is holding the 401K will take out at least 20% for withholding tax. Then when you file your tax return next year, you will owe another 10% penalty to the IRS. (These amounts may have changed since I had to cash out mine over 10 years age.)

SUB YES...

Depends on your age. You wont have a penalty if you are 59.5. If you are looking to pay off your debt have you considered talking to a financial consultant? There is an excellent company that will help you free of charge and you will be raving at the outcome.

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