Have a Tax Question? Ask a Tax Expert
Your bank will have an IRA distribution form, that you will complete
Because you are onlder than 59 and 1/2, there will be no 10% penalty tax
what would the penalty be for withdrawing that amount?
The form will have a line to have tax withheld, if you like to handle it that way, then next year in Jabuary you will get a 1099 indicating the taxable income and showing the withholding, which will offset the tax
No penaly ... It will juat be added to your icome for the year
so if you have 50,000 of income that year, you'll actually hav 56,627
on which to pay taxes
so, essentially, it will be taxed at your marginal tax bracket
Is there a way to pay the taxes on this now?
You won't actually PAY the taxes, but it will work just like a W-2 ... you can have them withhold the taxes when distributing, then when you get the 1099 next year, you'll have withholding already done to offset the tax owed
what percentage should they withhold?
If you gie me a feel for your other income and how you file? (married filing jointly, single) then I can approximat your bracket and tell you how much t have withheld
10% is a very common, but again, can you give me your approximate income and filing status?
If you're in, say, the 15% bracket ... then withholding 15% will cover the taxes
single - about 40K
ok there will be a 3900 person exemption and 6100 standard deduction if nyou don't itemize ... so that makes your TAXABLE income (if you don't put monty into a 401(k) or have other deductions $30,000
(sorry for all the typos) .. getting the tax brackets now
taxable income from $0 to $8,925,
taxable income over $8,925 to $36,250
taxable income over $36,250 to $87,850
on taxable income over $87,850 to $183,250
on taxable income over $183,250 to $398,350
on taxable income over $398,350 to $400,000
on taxable income over $400,000
So ... 15% will do ot
so you'll just have them withhold 15% (that will be a box on the distribution form at the bank)
okay. Thanks - sorry for stupid question - so should I withhold 15% or 25% for this distribution?
sorry didn't read the end - got it
thank you - that answered my question.
nope there ARE no stupid questons ... but because your TAXABLE income will be 30,000 that extra $6000 will (all but $400 or so) be in the 15% bracket
Great - thanks again.
You're vry welcome
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