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RD, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 8784
Experience:  CPA, MBA, Over 10 yrs of experience in tax planning and business consulting..
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Hello just a small question here. I know a lot of people who

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Hello just a small question here. I know a lot of people who have 401k plans that are not in IRA's including myself. Is it better for me to have it in my 401k plan or Traditional IRA (rollover). I know there is a mandatory 20% withholding on 401k plans but what about the state taxes. (mich) In an IRA you can withhold what ever you want, but what about state taxes on an IRA?
When you rollover from a 401K to a traditional IRA - there is no tax witholding from the distribution at that point.

When you take a distribution from the plans-
to the best of my knowledge MI does not have any mandatory tax withholding.

In any case- whatever the withholding- you will owe tax on the distribution amount from these plans and so if the withholding does not cover the additional tax liability- you will owe tax while filing the taxes.

Let me know if you have any question.

Please note: This advice is provided with the understanding that all the relevant facts have been provided by you. Any change in facts might affect the advice given and hence may not be relied on in such cases. Nothing contained in this reply was intended or written to be used, can be used by any taxpayer, or may be relied upon or used by any taxpayer for the purposes of avoiding penalties that may be imposed on the taxpayer under the Internal Revenue Code of 1986, as amended.

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