11-21-2018, 04:11 PM
I'm in the process of selling my home and moving to another state. The timing is tricky, in that I will not have my current home sold and closed, before I have to put down money on a new home. I also have pay cash for the new home (combo of HELO and cash,) since I will not yet have a job in the new state, and therefore cannot get a mortgage. Unfortunately the "cash" will be a combo of a HELO, and retirement money drawn from my Roth and Rollover 401k. I am 60 and so there will be no penalty - but tax implications on the 401k withdrawal.
So my question is this - if I take a distribution from my 401k in August, but then when I start a new job in Sept - max out 401k deductions for Sept, Oct, November, December (the company I will join has 401k plan starting Day 1) - will I be taxed on the "Net" distribution number at the end of the year? The goal is to minimize the tax liability from the August withdrawal? And also, does the MAGI number only show the net 401k amount as taxable? Thanks!
So my question is this - if I take a distribution from my 401k in August, but then when I start a new job in Sept - max out 401k deductions for Sept, Oct, November, December (the company I will join has 401k plan starting Day 1) - will I be taxed on the "Net" distribution number at the end of the year? The goal is to minimize the tax liability from the August withdrawal? And also, does the MAGI number only show the net 401k amount as taxable? Thanks!