I was let go by my former company in 2011. I now receive unemployment benefits. Now that its 2012 and the unemployment benefits are running out along with my reserves and I need a way to continue paying for life because there are no jobs for me now. I need to take out my 401k early. I'm only going to make $5000 of taxable income in 2012 with unemployment benefits before it ends. So when it comes time to withdraw my 401k this means my tax bracket will be considered 10% or 15% right? OR does the IRS f you over and use the previous years tax bracket?Skip the lecture about how early withdrawal is bad. Its pretentious for those of use who are about to lose our home and literally be on the street because ******* want to move our jobs to India and China.
If your other income is only $5000, then the first $4500 from the 401K gets a zero tax rate, the next $8500 a 10% rate, then 15%. This assumes you are single.
