Do you file your taxes as single or married?
In the year that you plan to make that withdrawal, how much other income will you have for the year. Please include any income your spouse will also have if you are married.
Will any of your other income be from SS benefits? If so, how much?
I am single, and my SS will start in Feb, it will be $1440 a month.
Hello again Paciano,
Thank you for your patience while I ran some calculations.
When you receive SS benefits, you are only allowed to have a certain amount of other income for the year before part of your SS benefits may also be subject to tax. I had to fill out the worksheet to determine what this would be in your case.
If you withdraw $20,672 from your 401k plan, you will also owe taxes on $1,796 of your SS income. This will give you total reportable income for the year of $22,468. After applying your standard deduction and one personal allowance, this will bring your taxable income down to $13,118 for the year.
The taxes you will owe on that amount will be $1,550 federal and $260 for CA state taxes.
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Thank you Paciano
THANK YOU for your help. I appreciate your time.
Thank you Paciano and let me know if you need more help.