72 votes
Accepted

Why would a trading platform only allow withdrawal to the source of payment?

Because if they allow chaining, you can do the following scam: Deposit money via a credit card (possibly stolen). Withdraw money via PayPal. Withdraw the money out of PayPal. Trigger a ...
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  • 20.8k
69 votes
Accepted

Withdrew £2800, but only £2000 shows as withdrawn on online banking; what are my obligations?

Technically, you have no obligations. You asked for £2800 from your bank, satisfied your bank's requirements (ID, having the funds, whatever) and you were handed £2800. You never lied or ...
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  • 2,425
65 votes
Accepted

How do the rich and wealthy withdraw from accounts without leaving home?

Many services are available to people who are wealthy enough to use private banks. The linked Wikipedia article says: ...banking services (deposit taking and payments), discretionary asset ...
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  • 22.2k
59 votes

The "Cares act" allows $100,000 of 401k withdrawal without penalty. What are the reasons not to do this?

There are a couple reasons: You don't qualify. From your link: Distributions taken from qualified retirement plans received during 2020 of up to $100,000 for COVID-19 related purposes are allowed ...
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  • 8,392
40 votes
Accepted

IRS sent me a letter...I messed up by unwittingly taking money out of a Roth IRA and reporting it incorrectly

There could be a few reasons for this, my first guess is that you didn't report the distribution on your return (indicated on line 15 of your 1040, pictured below), the IRS got a copy of the 1099-R, ...
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  • 62.9k
39 votes
Accepted

If I switch jobs to a lower tax bracket right before I retire, do I save on 401k taxes?

Your tax bracket is determined by your total taxable income in a given year, where money drawn from a traditional-style deferred-tax 401k or IRA is taxable income. (Money drawn from a Roth account was ...
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  • 31.8k
33 votes
Accepted

Ask FBI permission to withdraw large sums from your checking or savings?

Is it true you have to file papers with the government in the US to withdraw large sums of cash at your local bank branch? It's true that a currency transaction report (CTR) gets filed with FinCEN (...
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  • 62.9k
23 votes

If I switch jobs to a lower tax bracket right before I retire, do I save on 401k taxes?

Your prior earnings have absolutely no bearing on the taxes due on 401k disbursements. Your 401k disbursements are considered income in the tax year in which they are received; whether or not you ...
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  • 48.4k
22 votes

Can I close my money in HSA and transfer it to another bank account and use it for non-medical purpose?

When you put money into the HSA, you didn't pay any tax on that amount. Now that you want to take money out, if you don't have any medical expenses to offset the amount you are withdrawing, you will ...
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21 votes

Withdrew £2800, but only £2000 shows as withdrawn on online banking; what are my obligations?

Do you want a legal opinion or a moral one? Morally You should notify them as soon as possible or else some poor employee is gonna have a really, really bad day/week/month/year. Legally You don't ...
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  • 6,454
21 votes

The "Cares act" allows $100,000 of 401k withdrawal without penalty. What are the reasons not to do this?

Getting money into qualified plans is difficult. Currently the tax law allows $19,500/year to be self contributed and in previous years it was less. It would take many years of maxing out ...
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  • 74.9k
16 votes

Withdrew £2800, but only £2000 shows as withdrawn on online banking; what are my obligations?

You have an obligation to tell them. That's not just a moral obligation; it's also a legal one. This has been proven time and again in court cases and criminal prosecutions, particularly when a ...
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13 votes

Withdrawing IRA early to pay off large credit card debt?

If your credit card's interest rates are not more than your 35% (25% for your tax bracket and 10% penalty), there is no way I would consider this. If you boil it down to the numbers, you are asking ...
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13 votes
Accepted

Why do grocery stores in the U.S. offer cash back so eagerly?

The only card I've seen offer this on credit card purchases is Discover. I think they have a special deal with the stores so that the cash-over amount is not included in the percentage-fee the ...
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  • 1,012
11 votes
Accepted

Old 401k investment choices: Cash it out, move it elsewhere?

I would create a "Rollover IRA". These IRAs are designed to take funds from a 401k and allow you to invest them without incurring a cash out penalty nor a tax due. You will have more choices than ...
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  • 17.2k
11 votes

Withdrawing cash from investment: take money from underperforming fund?

The root of the advice Bob is being given is from the premise that the market is temporarily down. If the market is temporarily down, then the stocks in "Fund #1" are on-sale and likely to go up ...
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  • 17.2k
11 votes

Are you allowed to withdraw from 401k for no reason if leaving the company?

As long as you're willing to pay the taxes and the penalties, once you're no longer employed you're allowed to do whatever you want. You can always do an "direct roll-over" (See IRC Sec. 401(a)(31)(A) ...
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  • 127k
11 votes

401(k) distribution tax calculation

I'm paying tax on the tax penalty? No, you're paying tax on the amount withdrawn to cover the tax. If you withdraw $31,250, you'll pay a tax of $31,250 * 20% = $6,250, netting $25,000. This process ...
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  • 113k
10 votes

Income tax effects of 401(k) hardship withdrawal to purchase home?

Generally if you need to tap into your retirement for the house - you probably shouldn't buy the house. But that's your call. There are several things you could do. Sue your CPA "friend" for ...
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  • 127k
10 votes

IRS sent me a letter...I messed up by unwittingly taking money out of a Roth IRA and reporting it incorrectly

I just want to point out something that seems to be generally true: If you are supposed to report something to the IRS, and you don't, the IRS will probably send you a letter assuming the maximum ...
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  • 45.2k
10 votes

Why would a trading platform only allow withdrawal to the source of payment?

I think there's (also?) a different reason than in the accepted answer. In general, credit card companies don't allow merchants to do cash-equivalent transactions, because they expect those to be ...
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  • 3,267
10 votes

Can a withdrawal on another party's bank account succeed if that account is insufficiently funded or is closed?

An ACH transaction is roughly equivalent to a check. An attempt to withdraw too much may get paid and trigger an overdraft state, or may be declined (and trigger an insufficient funds fee). These ...
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  • 62.9k
10 votes
Accepted

Taxes on 401k withdrawal

That seems reasonable given the facts presented. Normally, a 401(k) is a tax deferred account (you can have after tax money in there but that is less common so I ignore that possibility). The ...
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10 votes
Accepted

Best Way to minimize taxes on 401K distribution?

You should consider the option of converting a chunk into a Roth account every year (instead of into a taxable account). The (small) disadvantage is that it is basically 'stuck' for five years; the ...
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  • 36.7k
9 votes
Accepted

What should we consider when withdrawing a large amount of money from a bank account?

withdraw in cash - bank reports it to IRS no matter what. Would this affect my tax filing in the coming year? No, and no. The bank doesn't report to the IRS. In the US - the bank will probably ...
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  • 127k
9 votes

IRS sent me a letter...I messed up by unwittingly taking money out of a Roth IRA and reporting it incorrectly

The best thing you can do here is work with the IRS to the best of your ability. You can attempt to call them, attempt to go to one of their local branches in your area, or just hire an accountant to ...
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  • 74.9k
9 votes

Why would a trading platform only allow withdrawal to the source of payment?

There is also (or maybe even most important) a legal reason: As soon as a company transfers money from a source to a different place (like it would happen in this case), it fulfills the definition of ...
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  • 191
8 votes
Accepted

Cheapest way to wire or withdraw money from US account while living in Europe

I prefer to use a Foreign Exchange transfer service. You will get a good exchange rate (better than from Paypal or from your bank) and it is possible to set it up with no transfer fees on both ends. ...
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  • 3,632
8 votes
Accepted

Can I cash out my 401k every year (company match > withdrawal penalty)?

You are not allowed to take a routine 401(k) withdrawal each year. There are specific reasons that you might be allowed to take a withdrawal and what you're proposing doesn't fit into those categories....
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Only top scored, non community-wiki answers of a minimum length are eligible