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Wallstreet Esq.
Wallstreet Esq., Tax Attorney
Category: Tax
Satisfied Customers: 577
Experience:  10 years experience
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I bought a house this year (First time home buyer) and I

Customer Question

I bought a house this year (First time home buyer)
JA: The Accountant will know how to help. Please tell me more, so we can help you best.
Customer: and I used 10,000 from my 401K as part of the downpayment what kind of taxes am I looking at
JA: Is there anything else the Accountant should be aware of?
Customer: No
Submitted: 1 month ago.
Category: Tax
Expert:  Lane replied 1 month ago.

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

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Although there is relief from the 10% additional tax penalty (for distributing before age 59 and 1/2) for first time home buyers from an IRA, so sorry, but this doesn't apply to workplace pension plans such as 401(k)'s.

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(just wanted to make sure that you weren't saying that you rolled the dollars to an IRA first.)

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To calculate the tax, we'll need to know your marginal tax bracket for the year, because the distribution is simply added to your other income for the year - so what ever you distribute will be taxed at that the bracket that you're already in, because of your other taxable income for the tax year. (Plus 10% for the pre-age 59 and 1/2 penalty if it applies)

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If you'd like to tell me (1) how you file (single, married filing jointly, married filing separately, etc), (2) your other taxable income for the year, and (3) whether you have dependents, I can run the numbers for you

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Expert:  Lane replied 1 month ago.

Just to give you a feel ... Her are the tax brackets for single, and married filing jointly:

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Married Filing as single

Tax Rate Schedule X, Internal Revenue Code section 1(c)]

  • 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.

Married Filing Jointly or Qualifying Widow(er) Filing Status

[Tax Rate Schedule Y-1, Internal Revenue Code section 1(a)]

  • 10% on taxable income from $0 to $18,150, plus
  • 15% on taxable income over $18,150 to $73,800, plus
  • 25% on taxable income over $73,800 to $148,850, plus
  • 28% on taxable income over $148,850 to $226,850, plus
  • 33% on taxable income over $226,850 to $405,100, plus
  • 35% on taxable income over $405,100 to $457,600, plus
  • 39.6% on taxable income over $457,600.

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