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how much tax fed and WV state on withdrawing 500,000 from traditional

IRA ?age - 68...
how much tax fed and WV state on withdrawing 500,000 from traditional IRA ?age - 68
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Answered in 16 minutes by:
10/4/2013
Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16,581
Experience: Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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Megan C :

Hello! I am a CPA here to assist you with your tax questions. My goal is to provide you with excellent service today.

Megan C :

How are you today?

Megan C :

What type of other income do you have? And are you married, or single?

Megan C :

Okay, since you haven't stepped into chat yet, I will calculate the tax for you based on this being your only source of income, both under married and single.

Megan C :

If you are single, your tax would be $152,754 for federal.

Megan C :

If you're married, your federal liability will be $140,340

Megan C :

I would suggest taking $250,000 this year, and then $250,000 early in 2014. This will really save you on your tax bill. If you are married, the tax on $250,000 would be $51,817 - and taxes won't change drastically from 2013 to 2014, so you would pay about $104,000 total instead of $140,000 for taking the distribution in one year.

Megan C :

If you are single, your tax would be $62,836. Again, you save tens of thousands of dollars by splitting your distribution up.

Megan C :

This is because the $500,000 puts you in the 39% tax bracket, so some of your money is getting taxed at nearly 40%!

Megan C :

For state tax, if you are single I calculate that you will owe $31,375 on $500,000 of income

Megan C :

In West Virginia, your tax is the same if you are married as well.

Megan C :

The tax on $250K would be $15,125. So, you don't gain much from state taxes by splitting the distribution, but you stand to gain lots of money (enough to pay state tax!) by splitting it for federal taxes.

Megan C :

Do you have any further questions?

Megan C :

If not, please take a moment to rate my response as "excellent" so that I may receive credit for assisting you today

Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16,581
Experience: Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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Megan C
Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16,581
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Experience: Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

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