Do you owe at least $10,000 in back taxes? Book your FREE consultation with Choice Tax Relief by calling 866-8000-TAX or booking here:
https://choicetaxrelief.com/free-tax-...

My team can help you understand your options for a tax bill you can't afford. Free. No obligation. No judgment.

Cashed out your 401(k) and now owe a tax bill you can't afford? A withdrawal can trigger income tax plus a 10% early-distribution tax. In this video, I respond to someone who withdrew about $38,000 after a layoff and ended up facing a tax bill of more than $12,000.

I explain why a layoff or financial hardship doesn't automatically erase the 10% additional tax, where Form 5329 fits in, and the collection options that may be available when you can't pay: an IRS payment plan, a partial payment installment agreement, currently not collectible status, or an offer in compromise. Eligibility depends on your circumstances.

There are specific exceptions to the early-distribution tax. Check which rules apply to your type of retirement account and withdrawal:
https://www.irs.gov/retirement-plans/...

0:00 A $38,000 withdrawal and a surprise tax bill
1:07 Form 5329 and the 10% additional tax
2:07 Understand the tax cost before withdrawing
3:12 Options when you can't pay the IRS
4:17 What if you can't afford monthly payments?
4:56 DIY resources or professional help

#401k #TaxDebt #TaxRelief