How Many Working Days Are In A Year?
In the U.S., the average amount of working days in one year is 260.
What options does someone have to repay their 401(k) early withdrawal loan and what penalty will they incur if they are unable to make the payments?
Q. I borrowed $15,000 from my 401(k) in Feb, 09. In May, 09, I was laid off from my job. My only options for the loan were to pay it in full (not going to happen) or default. They would NOT allow me to continue making payments and would not transfer the loan to my new employer! Anyway, can you tell me how to calculate the penalty that I will be charged when i file my taxes for 2009?
A. Generally, the fees charged for early withdrawal amount to a 10% penalty. Sometimes the vendor of the company's 401(k) plan will take the 10% penalty from the proceeds when someone cashes out a plan. However, in your situation, there was no way to know this would eventually be considered a cash out. Because the contribution to the plan is pre-tax for federal purposes, you will pay regular income tax on the withdrawal as well. This means the calculation of total income on your tax return for 2009 will include the loan balance that was forgiven. Your taxable income will be higher than it would have been without this dollar amount. How much higher is to be calculated between you and your accountant or tax preparer. You can run a calculation for estimated annual liability using Publication 919 from the IRS. Beware! This process is like completing a simulated tax return. If you miss one number in your calculation, the whole thing could be wrong. This of course does not help you find your tax liability number. If you find after working through Publication 919 that you will be short on your tax liability payments, you can adjust your withholding with your new employer for the remaining periods in the year. This is a good idea to ensure that you don't have any underpayment penalties at tax time. Also, you can estimate what your check would look like using any changes you might make to your withholding allowances using the free Paycheck Calculator at paycheckcity.com.
In the U.S., the average amount of working days in one year is 260.
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Celebrate National Payroll Week 2024, September 2-6! Join the fun, take the survey for a chance to win big, and honor payroll pros. Discover the joy of getting paid and learn more about this year’s theme: "America Works Because We’re Working for America ®."