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Lev
Lev, Tax Advisor
Category: Tax
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Experience:  Taxes, Immigration, Labor Relations
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I live in New York. Took an early distribution (Im 42) from

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I live in New York. Took an early distribution (I'm 42) from a traditional IRA for a total of $36,000. I checked off the box for them to w/hold 10% Federal & also to w/hold State. Got the check today for $32,400. I assume they took the 10% federal off the top but nothing for the state or for penalties. I'm trying to make sure I set aside enough money for tax time. Was planning to set aside an additional 10% (early withdrawal) & about 7% (State tax) but I'm just not sure if that's enough. Yr advise would be appreciated.

Hi and welcome to Just Answer!
Your income tax liability is based on your total income, filing status, deductions, etc.
Th e amount of distribution from IRA account is added to your other taxable income and your tax liability is determined based on your total income.

So to estimate your total income tax liability we need to know your total income.
You may review tax rate schedule on last page on this publication - www.irs.gov/pub/irs-pdf/i1040tt.pdf
NY state income taxes are also based on your total income - between 4% and 8.97%

As a very raw estimate - assuming your federal tax rate will be 15% plus NY state income tax rate 6.85% plus early distribution penalty 10% - total estimated tax liability 31,85% or $36,000 * 31,85% = ~$11,500
Because $3600 were already withheld - you need to set aside to cover your possible tax liability $11,500 - $3600 = $7900.

Please be aware that is a very raw estimate - but I will adjust the estimation if you provide your other taxable income, filing status and deductions.
Let me know if you need any help.

Lev and 2 other Tax Specialists are ready to help you
Customer: replied 5 years ago.
Quick response: my current income is $72,000 ... i file 'married, filing separate' ... in terms of deductions, we own two homes ... typically, my husband takes one as a deduction (1099 interest statement) & I take the other one ... we have one son ... he usually claims our son because his income is higher than mine (about 90,000). thx

With your current income is $72,000 plus $36,000 - total $108,000

 

See publication I referenced above - Schedule Y-2-If your ling status is Married filing separately.

For taxable income between $69,675 and $106,150 - your marginal tax rate is expected to be 28% -

plus NY state income tax rate 6.85% plus early distribution penalty 10% - total estimated tax liability 44.85% or $36,000 * 44.85% = ~$16,100.
Because $3600 were already withheld - you need to set aside to cover your possible tax liability $16,100 - $3600 = $12.500.

 

Let me know if you need any help.

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