How do I use my 401k for startup funds, little taxes, and reinvesting?-unemployed?
boo’sworld asked:
I have a 401k from the job I just left. I want to start a small business. How can I use a portion of this to start up my business and not pay a fortune in taxes, as well as reinvesting the rest in a rollover IRA?
This entry was posted
on Sunday, May 31st, 2009 at 12:00 am and is filed under Personal Finance.
You can follow any responses to this entry through the RSS 2.0 feed.
You can leave a response, or trackback from your own site.
I have a 401k from the job I just left. I want to start a small business. How can I use a portion of this to start up my business and not pay a fortune in taxes, as well as reinvesting the rest in a rollover IRA?
June 1st, 2009 at 4:55 am
You might want to plan carefully. The amount taken out and not rolled over within 60 days is taxable. Some folks take some out in December and some out in January to spread the tax burden over two years. If you are not yet age 59 1/2 you may be subject to an additional 10% penalty.
Your 60 (calendar) day count for the rollover started the day after you received the check from them.
June 2nd, 2009 at 8:31 pm
There are no exceptions to paying taxes on a cashed out 401k. There are a few exceptions to the 10% penalty but starting a business is not one of them.