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Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 10103
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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How much can I withdraw form my IRA without incurring a tax

Customer Question

How much can I withdraw form my IRA without incurring a tax penalty. I know It will be taxed as income but what are the tax brackets? my gross income is $ 42,000
Submitted: 2 months ago.
Category: Tax
Expert:  Lane replied 2 months ago.

Hi Dorothy ... I can help here .. My name's Lane

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I hold a law degree, with concentration in Tax Law, Estate law & Corporate law, an MBA, with specialization in financial accounting & tax, a BBA, and CFP & CRPS designations, as well - I’ve been providing financial, Social Security/Medicare, estate, corporate, non-profit, and tax advice, since 1986.

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Please bear with me just a moment while I prepare your answer

Expert:  Lane replied 2 months ago.

If you are a single filer the brackets look like this

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  • 10% on taxable income from $0 to $9,075, plus
  • 15% on taxable income over $9,075 to $36,900, plus
  • 25% on taxable income over $36,900 to $89,350, plus
  • 28% on taxable income over $89,350 to $186,350, plus
  • 33% on taxable income over $186,350 to $405,100, plus
  • 35% on taxable income over $405,100 to $406,750, plus
  • 39.6% on taxable income over $406,750.

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It's important to remember, however, that the standard deduction for a single filer is 6200 and the personal exemption is 4050 AND for a taxpayer over age 65 there's an additional deduction of 1,550.

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So the first (6200 + 4050 + 1550) = 11800 of that 42000 is not taxed ... making your TAXABLE income for tax bracket purposes

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(42000 - 11800) = 30200

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And then, if you'll look back at those brackets, you can see that you have to hit 36,900 to get to the 25% bracket

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So you could pull (36,900 - 32,000) = 4900 and those dollars would only be taxed at 15%

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Thn the dollars you pull from the IRA over and above 4900 would be at 25%

Expert:  Lane replied 2 months ago.

Please let me know if you have any questions at all, before rating me

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If this HAS helped, and you DON’T have other questions … I'd appreciate a positive rating (using the stars or faces on your screen, and then clicking “submit") ... Otherwise I receive no compensation from JustAnswer for the work here.

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Thank you!

Lane

Expert:  Lane replied 2 months ago.

Hi,

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I’m just checking back in to see how things are going.

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Did my answer help?

If this HAS helped, and you DON’T have other questions … I'd appreciate a positive rating (using the stars or faces on your screen, and then clicking “submit")

...

But again, let me know if you need more on this.

Lane