What is the process of withdrawing all monies from a 401k account?
If a person is in the U.S. on an H1B visa, lives with a dependent wife (H4), worked for about 3 years (4% employer matching contributions into 401k), is laid off due to budgetary constraints, and the person wants to return to home country — then how can one go about getting all of the 401k money out, paying the least in penalties as possible?
Also, is it true that if the 401k monies are withdrawn in the month of January, since the total taxable income for that year is lesser than the limit required for taxable income, the person withdrawing ends up paying no taxes on the funds withdrawn from the 401k?