You will NOT have to pay any taxes on this, provided you do the rollover WITHIN 60 days. However, if you are older than 59 and 1/2, this 10% early-withdrawal penalty fee does NOT apply to you. What is a Direct IRA Rollover? This means the money never actually reaches your hands, it is wired from your old 401k administrator to your new one. If you take the cash from your old employer administered 401k plan instead of rolling it over to a Rollover IRA, you will have to pay early withdrawal penalties (10%) and a 20% tax withholding fee. - If you quit your current job with no intention of returning (aka "Separation from Service") during or after the age of 55, you are allowed to make withdrawals from your retirement savings account without paying the 10% early withdrawal penalty.
Who Voted for this Story You will NOT have to pay any taxes on this, provided you do the rollover WITHIN 60 days.
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