See exactly what a direct rollover, Roth conversion, indirect rollover, or cash-out does to your taxes — and compare all four under the same assumptions.
IRS rollover, mandatory-withholding, and early-distribution-exception rules verified against IRS Publication 575, the IRS Rollover Chart, and Revenue Procedure 2020-46. Federal income tax uses genuine progressive brackets for the selected tax year and filing status (IRS Rev. Proc. 2025-32 / 2024-40). State retirement-income tax treatment verified per state — see the confidence level shown after you calculate. Full methodology.
Fields below start filled with example values — edit them to match your own situation, or use Reset to clear back to the example. Fields marked * are required; the rest are optional and only improve accuracy.
Determines whether the 10% additional tax, Rule of 55, the public-safety exception, or Roth qualification can apply.
Your other taxable income for the year, not counting this transaction — used to compute the incremental (progressive-bracket) tax this transaction adds.
Optional rough estimate. The default shown is California's top marginal rate and may substantially overstate your actual state tax. Enter your expected marginal state rate if known. Source verification: high. Personal estimate precision: Low.
What you owe depends entirely on which of the four paths the money takes. A direct (trustee-to-trustee) rollover to a Traditional IRA moves pre-tax and after-tax-basis dollars with no tax and no penalty right now — a designated Roth 401(k) balance can't go along for that ride, since it needs a Roth destination, and the calculator flags that incompatibility rather than silently combining it. A direct rollover or conversion to a Roth IRA is the opposite: the full pre-tax amount converted is taxed as ordinary income this year, but there is no 10% early-withdrawal penalty regardless of your age, because a conversion isn't a “distribution” under IRC §72(t). An indirect (60-day) rollover or a cash-out both start the same way — the plan must withhold 20% federal tax under IRC §3405(c) before you ever see the money — but a 60-day rollover lets you avoid tax on whatever you redeposit within 60 days, while a cash-out is simply taxed as ordinary income, plus a 10% additional tax unless the Rule of 55 or another IRC §72(t) exception applies.
Worked example: a 45-year-old, single, with $60,000 of other taxable income this year, cashes out a $100,000 pre-tax 401(k). The plan withholds 20% ($20,000) before paying out the rest, so $80,000 actually lands in the account holder's bank account. But that withholding is only a down payment, not the bill: stacked on top of the existing $60,000 income, the $100,000 distribution generates $23,086 of incremental federal tax, plus a 10% early-withdrawal penalty of $10,000 since this person is under 59½ with no exception — a combined federal liability of $33,086 against $20,000 already withheld, leaving $13,086 still due at tax time. Of the original $100,000, only $66,914 is left once federal tax and the penalty are actually settled — nearly a third gone, and that's before any state tax.
Assumptions and edge cases: a designated Roth 401(k) distribution is only treated as tax-free once it actually meets the 5-year rule AND a qualifying event (age 59½+, disability, or death) — entering your first year of Roth participation is what unlocks that determination; without it, the calculator reports the amount as not-yet-determined rather than assuming it's tax-free. The Rule of 55 applies only to the plan of the employer you just separated from, never to an IRA or another employer's plan — rolling that balance into an IRA first removes access to the exception for that money going forward. A late 60-day redeposit is treated as fully taxable here, even though an IRS hardship waiver (Rev. Proc. 2020-46 self-certification) might still rescue it — that possibility isn't reflected in the number shown. State tax uses an editable, flat-rate personal estimate rather than a full progressive state calculation, with confidence flagged per state. See the full methodology page for source citations.
IRS rollover, mandatory-withholding, and early-distribution-exception rules verified against IRS Publication 575, the IRS Rollover Chart, and Revenue Procedure 2020-46. Federal income tax uses genuine progressive brackets for the selected tax year and filing status (IRS Rev. Proc. 2025-32 / 2024-40). State retirement-income tax treatment verified per state — see the confidence level shown after you calculate.
See the full methodology page for how every calculator on this site is sourced and how confidence levels are assigned.
Limitations and disclaimer
DueMATH provides estimates for educational purposes only and is not tax, legal, or financial advice. Tax laws change frequently and every situation is different — confirm any number here with a licensed CPA, tax attorney, or your state's Department of Revenue before making a financial decision.
No — the IRS's one-rollover-per-12-months limit only applies to IRA-to-IRA rollovers. Moving money out of a 401(k) — whether into an IRA or into another employer's plan — isn't subject to that limit, whether you do it as a direct rollover or an indirect (60-day) rollover.
Yes, and this trips people up. The Rule of 55 lets you take penalty-free withdrawals from the 401(k) of the employer you just left, if you separated from service in or after the year you turned 55. It only applies to that specific employer's plan — not to IRAs. If you roll the balance into an IRA before you need to withdraw, you give up the Rule of 55 for that money; IRA withdrawals before 59½ go back to owing the 10% early-withdrawal penalty unless a separate IRA exception applies.
Federal law (IRC §3405(c)) requires your plan administrator to withhold 20% for federal tax on an indirect (60-day) rollover, regardless of whether you intend to roll the full amount over. To complete a fully tax-free rollover, you have to redeposit the entire original balance — including the 20% that was withheld — within 60 days, using other funds to cover the withheld portion. Whatever isn't redeposited is treated as a taxable distribution, plus a 10% early-withdrawal penalty on that shortfall if you're under 59½. A direct rollover avoids this entirely, since the money moves institution-to-institution and nothing is withheld.
No — a Roth conversion is taxed as ordinary income on the full pre-tax amount converted, but it isn't treated as an early distribution for penalty purposes, so the 10% penalty doesn't apply to the conversion itself regardless of your age. One catch: the converted amount starts its own 5-year clock, and withdrawing it within 5 years of the conversion while under 59½ can trigger a separate 10% recapture penalty — this calculator doesn't model that follow-on withdrawal, so keep it in mind if you might need the converted funds soon.
No — federal tax uses your actual progressive tax brackets, but the state figure is a rough, editable estimate based on your state's general treatment of retirement distributions, not a full state-specific progressive calculation. Treat it as a starting point and confirm the exact figure with your state's tax tables or a tax professional before filing.
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