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Withdrawing $$$$

s.guns.gun Member Posts: 3,245
edited November 2016 in General Discussion
What is a safe way to withdraw a large sum of money from 401k and give it to someone as a gift ??? What type of check should I request that would not involve a fee or the smallest fee available???
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Comments

  • gearheaddadgearheaddad Member Posts: 15,091 ✭✭✭
    edited November -1
    Cashiers check. I can't imagine there is a charge. Unless of course it's a penalty for early withdrawal or a tax for a gift above the limit allowed.
    Ask the institution where the 401K is at, and of course I would ask my accountant.
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  • nmyersnmyers Member Posts: 16,892 ✭✭✭✭
    edited November -1
    I think that we need to stay out of your personal finance & stick with firearms. You need advice from a professional financial adviser who is familiar with your situation.

    Neal
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  • pwilliepwillie Member Posts: 20,253 ✭✭✭
    edited November -1
    wire transfer fed funds to receivers checking or savings account...Cashiers checks are no good...[;)]
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  • cbxjeffcbxjeff Member Posts: 17,624 ✭✭✭✭
    edited November -1
    I believe $10K is the max gift tax. You should have direct deposit available from your 401K. This is a question for bigoutside.
    It's too late for me, save yourself.
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  • wiplashwiplash Member Posts: 7,145 ✭✭
    edited November -1
    Don't you have to pay taxes when you withdraw from your 401K?

    I think I heard that if you put into an IRA, there were no taxes and then you could work with the money a little easier.

    But then again, I am not an Attorney!
    There is no such thing as Liberal Men, only Liberal Women with Penises.'
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  • oldWinchesterfanoldWinchesterfan Member Posts: 1,050 ✭✭✭
    edited November -1
    quote:Originally posted by nmyers
    I think that we need to stay out of your personal finance & stick with firearms. You need advice from a professional financial adviser who is familiar with your situation.

    Neal


    +1
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  • drl50drl50 Member Posts: 2,496 ✭
    edited November -1
    If you are over 59 and 1/2 years old, there is no withdrawal penalty. A recipient can receive gifts totaling up to $14,000 from ALL sources without it being taxable to him/her. For the owner of the 401K, any withdrawal will be taxed as income regardless of the amount. If you are under 59 1/2, there will be an early withdrawal penalty in addition to being taxable. Large withdrawals in the same year could put your total income into a higher tax bracket for that year as well. Consequently, you might consider gifting half on December 31st and half on January 1st or some other annual installment in different tax periods. Remember, there is no income tax to the recipient of a gift up to $14,000, but the withdrawal is taxable as income to the owner of the 401K making the gift regardless if it is given to someone else. Same rules apply to an IRA.As far as how to give it, deposit the 401K distribution to your checking account and write either a personal check or have the bank write a cashiers check for a small fee usually under 5 dollars. The taxable event to you occurs when you withdraw the money from the 401k. Any income taxes it creates, show on your return for that year. Some companies 401k have additional withdrawal rules of their own if you are under 59 and a half.
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  • TooBigTooBig Member Posts: 28,559 ✭✭✭
    edited November -1
    Are you having a GB drawing and I'm in[:D][:p]
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  • mogley98mogley98 Member Posts: 18,291 ✭✭✭✭
    edited November -1
    A little known exception to the 59 1/2 rule.

    IF you lose your job for ANY reason, quit, fired, laid off in the year not when you are but in the year you turn 55 you can withdrawal from your 401K without the 10% tax penalty.

    Of course you still have to pay taxes on the money you withdrawal but the penalty doesn't apply.

    That is how I retired at 55 and paid of my house, land, cars and started my own business as a debt free person. I figured that way I could make minimum wage and get by if need be.

    Also everyone will tell you taking the money is a mistake, however I was paying 6% interest on the house land and cars averaged out and earning less then 2% on my savings.

    Each person has to look at their own situation and as mentioned talk to an accountant. The money spent on a good accountant usually pays for itself.
    Why don't we go to school and work on the weekends and take the week off!
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  • GrasshopperGrasshopper Member Posts: 17,019 ✭✭✭✭
    edited November -1
    As Neil said,,and I believe it is 20 k now that is tax free.
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  • drl50drl50 Member Posts: 2,496 ✭
    edited November -1
    From the current IRS website:

    The annual exclusion applies to gifts to each donee. In other words, if you give each of your children $11,000 in 2002-2005, $12,000 in 2006-2008, $13,000 in 2009-2012 and $14,000 on or after January 1, 2013, the annual exclusion applies to each gift. The annual exclusion for 2014, 2015, 2016 and 2017 is $14,000.

    https://www.irs.gov/businesses/small-businesses-self-employed/frequently-asked-questions-on-gift-taxes
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  • jltrentjltrent Member Posts: 9,337 ✭✭✭✭
    edited November -1
    quote:Originally posted by pwillie
    wire transfer fed funds to receivers checking or savings account...Cashiers checks are no good...[;)]
    +1 I saw this happen several times while working in the banking business from some people who had knowledge of what best to do.
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