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Ask Megan C Your Own Question
Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16576
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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I am married however getting a divorce. I would like to take

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I am married however getting a divorce. I would like to take out $300,000 from a 401k to purchase a home for myself. My husband and I own a farm. Our adjusted income was $30,000 for 2012. What would the tax implications be on that withdrawal. I am 62 years. old.

MyVirtualCPA :

Thank you for your question, and thanks for using JustAnswer.com

Customer:

Do you need more information? would it be better to take out $200k

MyVirtualCPA :

You are over the age of 59.5 so you would not have a 10% penalty

MyVirtualCPA :

However, you would owe income tax on the entire amount

Customer:

that is my question? how much

MyVirtualCPA :

Taxes on $330,000 of income assuming you are single at the end of the tax year are $90,211

Customer:

I would still be married.

MyVirtualCPA :

On $230,000 it will be $57,211

MyVirtualCPA :

Ok

Customer:

on 230k what would it be if I were still married

MyVirtualCPA :

Let me take a look

MyVirtualCPA :

Still married your tax on $330,000 is $79,450

MyVirtualCPA :

$230,000 it's $46,719

Customer:

is there a tax table that I could view regarding different amounts on dispersal including income?

MyVirtualCPA :

I use the TurboTax Taxcaster to estimate taxes

MyVirtualCPA :

http://turbotax.intuit.com/tax-tools/calculators/taxcaster/

MyVirtualCPA :

It uses 2012 figures, but the 2013 values won't vary by much

Customer:

do you think it better to get a mortgage and pay interest, vs.pay taxes on dispersals

MyVirtualCPA :

I think it would be better to get the mortgage, then take out of your retirement over a number of years to pay off your loan quickly

MyVirtualCPA :

Or even just take out enough each year to make your loan payments

MyVirtualCPA :

This will spread the liability over several years

Customer:

do you think I should consider renting, to save money

MyVirtualCPA :

No, I think over the long term home ownership is better

MyVirtualCPA :

if you can afford it

Customer:

thank you

MyVirtualCPA :

you're welcome

MyVirtualCPA :

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

Megan C and other Tax Specialists are ready to help you