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Hi and welcome to Just Answer!
I will help you to estimate your tax liability if needed.What we need to know - your total income, expected amount of distribution, filing status, deductions.
Any other related information? Dependents? allowable tax credits, etc?
Ok, let me grab that info, one moment...
You may do estimation on your own if you want - here is the website you may use - http://hrblock.com/free-tax-tips-calculators/tax-estimator.html
Ok, so this is a hard one to answer since I was laid off in Sept. 2011... My wife works and makes $79k I was working at MSFT and make around $120K. I'm still looking for a job and hope to have one in the next month or two for about the same salary range. Is there some way to estimate this?
Dependency would be 1
what is your expecting distrinbution from IRA?
The expected amount (assuming it would be all) would be around $130k before any taxes
I'm open to doing just part but I need to know where the threshold would be for me before I entered another tax bracket. I know that since I cannot say for certain what my income would be, this is hard; which is why I'm asking online here ;)
sorry, the expected distribution (if the entire account was converted) would be $130k
as I mention, I'd be open to just doing part if that would be a better choice
One other thing to mention, is that I did take a distribution from my IRA already in 2012. I took $30k and withheld 30% from that amount for taxes.
Your estimated tax liability WITHOUT distribution - assuming standard deduction, filing jointly, 1 dependent child - ~$37,000.With ADDITIONAL taxable distribution $130,000 - your estimated taxable income will be $80,000 plus 10% penalty $13,000.That means - your ADDITIONAL tax liability - specifically for $130,000 distribution - is estimated as $56,000.
State income taxes will be extra.
Considering your high income tax bracket _ I might suggest trying to avoid distribution.
Ok, thanks that's what I wanted to know.