Have a Tax Question? Ask a Tax Expert
Your estimated tax for 2011 would be $40237 as single and standard deduction.You will also have a 10% penalty ($9100) for being under 59 1/2 on the distribution this would add to your tax liabilty. This would bring your total tax to $49337 for the year.
If you request a distribution the 20% withholding ($18200) on the IRA would mean that you would receive $72800 on the distribution. If you have a basis in the IRA that portion would not be taxable. Basis would refer to any amount inthe IRA that was not allowed as an adjustment to your income in the year of contribution.
The penalty is not calculated until you file your return. So it would be added to the tax liabiltiy. You would most probably wish to make an estimated tax paymrnt to cover yourself.
Did that cover everything you were interested in?
One question- this is over and above all payroll taxes I pay?
No, any withholding you have will be subtracted from the tax liability on your tax return.
So I would owe next April 15th approx. 50,000 if I usually break
In total. But the withholding you have is important. If you generally break even the you would need to be concerned with hte 10% penalty ($9100) this amount would not be withheld anywhere. The withholding on the distribution will most probably cover you but if you want to check to make sure your withholding will cover you for the increase in income the IRS has a calculator you can use to see if enough will be withheld for youhttp://www.irs.gov/individuals/article/0,,id=96196,00.htmlUse the above link to access the calculator
even with the IRS.
The calculator will give you a heads up and you can see if by changing your withholding amounts now the tax can be covered by changing your withholding for the remainder of 2011.
Thank You, XXXXX XXXXX been alot of help.
Thank you, XXXXX XXXXX remember, you can always come back even after you click ACCEPT
You are welcome