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Phillip B, EA
Phillip B, EA, Enrolled Agent
Category: Tax
Satisfied Customers: 638
Experience:  Practicing since 2004. Expert in 1040, small business, represent vs. IRS, & int'l tax mattters.
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HAVE BEEN UNEPLOYED OVER 3 YEARS LIVING OF 40K SAVINGS HAD

Customer Question

HAVE BEEN UNEPLOYED OVER 3 YEARS LIVING OF 40K SAVINGS HAD $28,500 IN MEDICAL BILLS THIS YEAR HOW MUCH CAN I DRAWOUT TO HAVE TAX OFFSET BY ITEMIZED MED. BILLS...I HAVE NO OTHER REAL DDUCTIONS.$200,000 IN 401K, APPROXIMATELY $50,000 ALREADY WAS TAXED AS PART OF CATCHUP. I AM 61 YEARS OLD AND WOULD LIKEE TO KNOW SOME OPTIONS, SUGGESTIOONS,NUMBERS
Submitted: 1 year ago.
Category: Tax
Expert:  Phillip B, EA replied 1 year ago.
Thanks for using JustAnswer.com!

I am assuming you have 200,000 dollars still in your 401K. If you have already drawn 50,000 dollars from your 401K this year, let me know.

You can take as much from your 401k as you need, because you are 61 you don't have to worry about withdrawal limits or penalties.

However, medical expense deductions are limited to expenses beyond 7.5% of adjusted gross income (AGI). So, if your AGI is 50,000 dollars from 401k withdrawals, you will be able to deduct 24,750 dollars of the 28,500 dollars of your medical expenses. As your AGI increases, you will be able to deduct less of your medical expense. Unfortunately, medical expenses are not the most beneficial deductions.

If there are other questions and concerns, please reply to this answer so that I can assist you further. If this answers your question, please rate my performance between OK and Excellent Service so that I may be paid. Thanks for your business.
Phillip B, EA, Enrolled Agent
Category: Tax
Satisfied Customers: 638
Experience: Practicing since 2004. Expert in 1040, small business, represent vs. IRS, & int'l tax mattters.
Phillip B, EA and 12 other Tax Specialists are ready to help you
Customer: replied 1 year ago.


i have indeed taken $50k out earlier this year so it appears a wash for medcal...deductions.how much tax if i retrieved the other$150,000 knowing that $50,000 has already been taxed in ctchup program I am going to have to buy a new domicile soon...and not knowing what the new year holds...should i pay whatever now and be bone.i applied for SOC SEC DISABILITY 15 MONTHS AGO CASE STILL PENDING AND IF I LOSE MY APPEAL REAL SOC SEC BEGINS 11,2013


 


francis long

Expert:  Phillip B, EA replied 1 year ago.
If you are filing as single and your only deduction is the 28,500 dollars of medical expenses, 200,000 dollars of income would bring a tax of 44,654 dollars. If you are filing jointly, the tax would be 37,731. The actual results will vary if there are other income items, or deductions.

Let me know if there is anything else that I can do.

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