Have Tax Questions? Ask a Tax Expert for Answers ASAP
Hello and thanks for trusting me to help you today. I am a tax adviser with over 15 years of experience.It would be best to look at what your total taxable income will be with the IRA distribution added to it. Your taxable income would be $134627 (single standard deduction). That will place you in the 28% bracket for taxation.
You can count on your withholding from wages for a portion of your total tax liability (which will be $30989). The remaining will need to be withheld or you can make an estimated tax payment from teh distribution.
If you want the IRA distribution to have withholding then ask for 28%. You can ask that 6% be withheld for state.
When you file your return you will be credited with the withholding (just like for wages).
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According to the forms I do not need to pay any state tax for PA. So if I ask them to withhold 28% that would cover me so that I would not owe anything else on taxes since that is my total income for 2013?
Yes, that amount should cover you providing you are having the correct amount withheld from your pay already. Remember, the IRA amount will be added to your regular income for the year. Your wage withholding and the IRA withholding should cover you.
If I changed my mind and take out about half of the value is there any advantage to doing that with regards XXXXX XXXXX For example if I took 70,000 out would that be to my advantage?
You would have a less amount of tax to pay. One sec and I will calculate.................
Your total tax liability would be $18493. You are still in the 28% bracket (if single)
ok thank you very much. We usually file our taxes seperatly, but if we filed jointly what would that do to this formula.
Does your spouse have income?
Yes, he makes about $100,000. per year
If you took out $70,000 then your total tax would be $37866. Even joint you are in the 28% bracket.
I think that answers my questions. This IRA is my personal investment that I have kept to myself and was trying to avoid having to include it with our regular tax numbers by paying everything up front. If I have the 28% deducted does it still have to be part of our taxes? If so, I have to confess to my husband that I have had to for a long time as my "future investment" I want to buy into the company that I work for now and become a partner in the business which would allow me to make a considerable amount of income. Just trying to do this all on my own without involving him. I know he would be a support system once I do it and the money is there but tough for him to make a decision. Sorry for rambling but just wanted to share my goal.
Yes you still have to report the total on the return and the withholding as well.
Your goal is valid.
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