Question: I took money out of my 401K to get my home out of foreclosure because I lost my job. Do I have to pay taxes and penalty on that money? Howard, Bronx, NY
Answer; It all depends on your age. If you’re under age 59 Â½ you have to pay the 10% penalty and the amount you withdrew is subject to income taxes. If you’re over 59 Â½ you won’t get socked with the penalty, but you will still owe income taxes.