I've recently qualified for profit sharing. I received a check, which I was originally to deposit into a new SEP IRA. I've since decided to cash the entire check (as others at my place of employment have done) to wipe out the majority of my debt. What is the penalty fee? I thought it was 25%, my coworker said her penalty was 10%. Would there be another fee as well? Please advise.
The penalty for qualified money when under 59 1/2 years of age is 10%. then you will pay ordinary tax on that money. So if you happen to be in the 25% tax bracket, you'll end up owing 35% on the entire amount you cashed.
if you are asking what the 'penalty' for early withdrawal, it is probably similar to all the other plans, 10% PENALTY
of course the amount you withdraw is added to your gross income and taxable at your rate
the state will also have a % penalty as well
approx 37pct………10 and 25pct are incorrect….