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Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16559
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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I am a retired elementary school teacher and have money in

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I am a retired elementary school teacher and have money in stocks, bonds, and fixed annuity. I plan on taking out my stocks and bonds to pay off bills that came up. Our broker suggested we have the taxes taken out before we are given the money. What percentage should we have taken out? We have our taxes from last year, and we will be making about the same we made last year, plus the stocks and bonds we take out. Thank you for any help.

MyVirtualCPA :

Thanks for asking your question! I'm sorry to hear about your tax issue and I'm going to try my best to help you understand or resolve it.

MyVirtualCPA :

If you make under $400,000 per year, your capital gains rate will be 15% provided you are in at least the 25% tax bracket

MyVirtualCPA :

The sale of stocks and bonds will be taxed at 15%, so that is the amount that you should have withheld or set aside for taxes.

MyVirtualCPA :

Indiana will tax the gains at a rate of 3.4%

MyVirtualCPA :

So, altogether you will pay about 18.4% on your gains.

MyVirtualCPA :

Keep in mind, that only the gains are taxed. Not the entire withdrawal

MyVirtualCPA :

Is there anything else that I can assist you with today?

MyVirtualCPA :

If not, please rate my response as "excellent" so that I may receive credit for assisting you today

Megan C and 2 other Tax Specialists are ready to help you
Judy,

I see we were having trouble in live Chat. Please review my response. When satisfied, please rate as "excellent" so that I may receive credit for assisting you today. Thanks again
Judy,

Thanks so much for your positive rating. I'm sorry that you had trouble viewing your answer! Please be sure to come back and visit me, any time you need to ask a tax, finance, or social security question.

Thanks again!

Megan
Customer: replied 3 years ago.

I just replied in another place. I hope you get it.

Judy,

I'm sorry, but I do not see a reply anywhere. How may I assist you?
Customer: replied 3 years ago.

We need to take out around $55,000. out of my stocks and bonds to pay the unexpected bills. Tax information from last year: Adj. gross income $77,805; taxable income $57,155; total tax $7,706; effective tax rate 9.9%. We are both retired and on Medicare (me 9/13), have pensions, social security, and I have a part time job. We will make around the same this year as we did last year. So what percentage in taxes should we have set aside or taken out for the stocks and bonds we take out? I don't understand tax rates as you declare more money in one year. Thanks for any help.

Judy,

The rates that I stated earlier still apply: You will put aside 15% for your federal tax, and 3.4% for your state tax. The tax on capital gains (which is what stocks and bonds are) is a flat tax.

Please let me know if you need anything additional. If not, please rate as "excellent" so that I may receive credit for assisting you today.