- 1). Ask your employer about its withdrawal policy. Individual employers set their own policies and may allow you to withdraw money early under a hardship clause for college tuition.
- 2). Calculate the tax on your withdrawal. In addition to being counted as income on your taxes, the Internal Revenue Service imposes an additional 10 percent tax for early withdrawals before you reach age 59 1/2. The additional penalty on your taxes means that withdrawing from your profit-sharing plan could add a significant cost on top of your college tuition: You may be better off seeking a student loan if you can find low interest rates.
- 3). Obtain a form for withdrawal from your employer, fill it out and return it to the address indicated on the form.
- 4). Pay your college tuition from the disbursed funds.
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