Accepted Answer

Hello XXXXXXX,

The tax you will owe will depend on your total income for the year, including the withdrawals you make, as your income is taxed at graduated levels.

However, if you are a single person and still working, taking a withdrawl of the entire amounts ($56,000), generally you should fall in the category where this would be taxed at a rate of 25% for federal tax. You would also owe somewhere in the range of 4.5% for OH state tax on the withdrawals.

When you make the withdrawals, the tax is due in the year the withdrawals were made. You may wait until the end of the year to pay the entire amount due, but by doing that you would end up paying some penalties and interest due to the underpayment. For that reason, when you make these withdrawals, you should ask the plan administrator to withhold the money you will owe for taxes so you will not get hit with these extra charges at the end of the year.

If this was helpful please press the Accept button. Positive feedback is also appreciated.

Thank you XXXXXXX


Edited by Merlo on 10/28/2009 at 8:28 PM

Expert:	Merlo
Pos. Feedback:	99.8 %
Accepts:
Answered:	10/28/2009

Accountant

25+ years tax consulting. Specializing in returns for US citizens living abroad