Financial advice for 401k loans vs. using the CARES act

Company my wife worked for closed for good last year. They had option to withdraw up to 100k and pay 10% tax on withdrawal. It was different than this Cares act where you report it as income and pay taxes over 3 years.

 

Curious....did your skim show that it expired in 2020?.....serious question, I'm wondering if it got renewed and I missed that......???

Dang, 180 months!......I guess the only big risk there is if you lose your job its due.....I forget the timeframe on "Due", but if it was 30 days or something thats rough....even 90, on basically a mortgage would be tough.....I agree with it being a big gamble

I agree on the stress. This option probably wouldnt be for me, but it is an option none-the-less.

I think we are agreeing, but are differing on the definition of technical terms.

Are you saying she wound up with 90K, and only paid 10% tax TOTAL????....I'd be all over that too.......did it count as income?

With my CARES withdrawal, they took out 10% in taxes, which appeared to be a "common" rate of tax for withdrawals, but waived the 10% penalty for "early withdrawal".

I'm not sure if the 10% tax was something I could have declined to pay at the time of withdrawal or not......I just let it go because I knew even 10% tax was not enough and I would still owe at tax time, but it wouldnt be such a big hit at tax time when the money had been spent.

I also am not pursuing the 3 year spread on tax payment. I know I could, but I dont see my taxrate changing after I stop working, so I might as well pay it while I'm earning.

 

Has anyone else read about the CARES act being extended by 180 days? It was supposed to end in December but I saw an article that it was extended.

 

That was option she had. Or keep account and transfer to new employer when eligible which is what she is doing.
I just know they offered (due to covid) to take out up to 100k and pay 10% tax with nothing else, no other tax or penalty. So yes she would get 90k. Think common rate would be around 20% + 10% penalty.
Cares look like you report it like income and pay normal tax rate just spread on 3 years with penalty waived.
Maybe there are different deals depending who you work for?

 

Think long and hard about the fixing up you want to do. Around here, houses that used to be sold with the intention of fixing up and flipping are selling for about the same price per sq ft as houses that are already renovated.
Unless you’re doing renovations that will significantly raise the value (such as adding sq footage), sell it as is.
One of the problems with doing renovations is that they often uncover unexpected items.
Get your house on the market ASAP.

 

Different parts of it have had extensions. For instance, the EFMLA & EPSL tax aspects of the FFCRA and then cares act were given an option to be extended at the company’s discretion. First, until 3/31, and now until 9/30 under the latest.

 

most fixing you should do is neutral color paint and cleaning.

 

Thanks. I have our HR person looking in to what options I have. It is quite nice to have an HR professional that will help a person, unlike the nasty old hag that we used to have who sat on her big ass and dreamed up ways to make life harder on the employees.