Tax

Have a tax question? Ask a tax Expert

Ask an Expert,
Get an Answer ASAP!

I am 68Yrs old, and want to start withdrawing my 401k. My gross…

Customer Question
I am 68Yrs old, and...
I am 68Yrs old, and want to start withdrawing my 401k. My gross income last year was 12,000.00 I would like to know which would be better for my taxes to receive more than 120 payments, or less than 120 payments. The dollar amount would not be much
Submitted: 2 years ago.Category: Tax
Show More
Show Less
Ask Your Own Tax Question
Answered in 9 minutes by:
6/1/2015
Tax Professional: Lev, Tax Advisor replied 2 years ago
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 32,860
Experience: Taxes, Immigration, Labor Relations
Verified
Hi and welcome to our site!The issue is that distributions from 401k plan are taxableand large taxable income will result that your social security benefits will be partly taxable.So - assuming that your income $12000 is from social security benefits - these benefits are not taxable.A simple test is - take other taxable income PLUS a half of your social security benefits - if the total is less than $25,000 - none of your cocial security benefits woudl be taxable.Consider following example - assuming - you are single - $12000 from social security benefits - another $12,000 from 401k distributionsthen - none of your social security benefits are taxable - your only taxable income - $12,000 from 401k distributions - because of your standard deduction (increased because you are above 65) and personal exemption ($4000 for 2015) - you will NOT have any income tax liability.
Ask Your Own Tax Question
Customer reply replied 2 years ago
I'm sorry, that didn't answer my question. What is better tax wise. more than 120 payments (more than 10 yrs) or less than 120 payments (less than 10 Yrs)
Tax Professional: Lev, Tax Advisor replied 2 years ago
Tax wise - that makes NO difference.But whether that distribution will be taxable or not depends not on number of payments - but on the amount distributed and on your other income.I provided above example when 401k distribution woudl NOT be taxable.If your distribution is larger - it becomes taxable.So - from tax prospective - we need to estimate possible tax liability.Let me know what actual distribution amounts you are planning - and I will verify your possible tax liability.
Ask Your Own Tax Question
Customer reply replied 2 years ago
That's OK, if either makes no difference, than that's fine. Thank You
Tax Professional: Lev, Tax Advisor replied 2 years ago
The difference is NOT based on the number of payments - but on your income in each particular year.
If your taxable income is low - you might want to have distributions in control - and not to trigger the situation when your social security benefits become taxable.
But as long as your total taxable income (after all allowed deductions) woudl be zero - you would not pay any additional tax of distributions.
That also affects your withholding - the administrator might ask you to file form W4P and specify your withholding - so if none would be taxable - you may want to avoid withholding so - no need to wait till the tax filing to get the money back.
So - in your situation - it might be important to know what tax liability to expect (if any).
Let me know if you need any help.
I am here to help you with all tax related issues.
Ask Your Own Tax Question
Was this answer helpful?
Ask Lev Your Own Question
Lev
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 32,860
32,860 Satisfied Customers
Experience: Taxes, Immigration, Labor Relations

Lev is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response...

T.G.WMatteson, IL

I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, MN

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with.

OrvilleHesperia, California

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Wallstreet Esq.

Wallstreet Esq.

Tax Attorney

586 satisfied customers

10 years experience

Mark D

Mark D

Enrolled Agent

1,338 satisfied customers

MBA, EA, Specializing in Business and Individual Tax Returns and Issues

Richard

Richard

Tax Attorney

4,495 satisfied customers

29 years of experience as a tax, real estate, and business attorney.

PhillipsEsq.

PhillipsEsq.

Attorney-at-Law

59 satisfied customers

B.A., M.B.A, J.D.

Robin D.

Robin D.

Senior Tax Advisor 4

15,272 satisfied customers

15years with H & R Block. Divisional leader, Instructor

Megan C

Megan C

Certified Public Accountant (CPA)

8,655 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

jgordosea

jgordosea

Enrolled Agent

2,885 satisfied customers

I've prepared all types of taxes since 1987.

< Previous | Next >

Related Tax Questions
VA form asks for adjusted gross income (disability form). We
VA form asks for adjusted gross income (disability form). We file joint; can we separate his income from mine for the form? How? … read more
emc011075
emc011075
Senior Tax Specialist
Bachelor's Degree
16 satisfied customers
Filed form 1040 form took the standard deduction, I am now
filed form 1040 form took the standard deduction, I am now filing the new york state, … read more
Lev
Lev
Tax Advisor
32,860 satisfied customers
VA income tax return form 760, Line 16, “ Taxable Income -
VA income tax return form 760, Line 16 , “Virginia Taxable Income - Subtract Line 15 from Line 9” what are the two bubbles “DTD” and “LTD” ? Should I fill in one ?… read more
PDtax
PDtax
Owner
Master\u0027s Degree
1 satisfied customers
My only taxable income is $2287.10 from IRA distribution. I
My only taxable income is $2287.10 from IRA distribution. I am rated 100% VA disabled. My social security and VA pension are non-taxable. I have no other reportable income. How do I determine if I owe… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
15,272 satisfied customers
Second opinion], I understand there is a standard deduction
Second opinion] Hi Richard, I understand there is a standard deduction of 10,300. I am a new business start up and don't know much. I think if I use this I am not allowed to use important itemized ded… read more
Lev
Lev
Tax Advisor
32,860 satisfied customers
Is there a standard deduction for social security. My and my
Is there a standard deduction for social security. My and my wife's total ss was 44534.00. She has $1324.00 if other W2 earnings. I have some consulting fees that will not go on Form 1040. … read more
Cole Parker
Cole Parker
Principal/CPA
Bachelor\u0027s Degree
108 satisfied customers
Have always taken standard deduction in past, but lots of
Have always taken standard deduction in past, but lots of special circumstances this year. If I could please have list, and then know where to research any details after master list. … read more
Barbara
Barbara
Enrolled Agent, Paralegal
5,129 satisfied customers
Can I take mortgage interest and the standard deductions?
Can I take mortgage interest and the standard deductions? … read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
15,272 satisfied customers
What is the amount of Standard Deduction for Single tax
What is the amount of Standard Deduction for Single tax filer NJ … read more
Lev
Lev
Tax Advisor
32,860 satisfied customers
My son has income less than standard deduction, but it shows
my son has income less than standard deduction, but it shows he owes taxes? … read more
abci168
abci168
Principal
27 satisfied customers
What is the Standard Deduction for 2017 taxes? My husband
What is the Standard Deduction for 2017 taxes? My husband and I are each over 75 years old, and have learned that we do not need to file is our non-Social Security income is less than the Standard Ded… read more
Gerald, Esq
Gerald, Esq
Juris Doctor
3,868 satisfied customers
How do i find my standard deduction. What is my standard
I asked the question and got an answer of 7900 $ but I ant find the place where it was answ.red… read more
Richard
Richard
Tax Attorney
Doctoral Degree
4,495 satisfied customers
In 2018 can I take the standard deduction (24000 file
In 2018 can I take the standard deduction (24000 file jointly) and take property taxes and morale interest. … read more
emc011075
emc011075
Senior Tax Specialist
Bachelor's Degree
16 satisfied customers
Turbo tax suggested using standard deductions because of
turbo tax suggested using standard deductions because of lack of deductions (return of $1867). I reviewed my deductions and found two I missed, this increased my return to $2963. Some how the standard… read more
Fred Rook
Fred Rook
Corporate Controller
BSBA
129 satisfied customers
The standard deduction is 12,700 for married filing jointly
The standard deduction is 12,700 for married filing jointly why does the 1040 form say 4050? … read more
Barbara
Barbara
Enrolled Agent, Paralegal
5,129 satisfied customers
How does applying the standard deduction, or any itemized
how does applying the standard deduction, or any itemized deductions, impact your federal tax bracket? the top end of the 15% tax bracket is $75,900 for married filing jointly and the standard deducti… read more
Carter McBride
Carter McBride
LLM
1,077 satisfied customers
My withholding exceeds my tax liability for each of the the
My withholding exceeds my tax liability for each of the the first three quarters of 2017. However, in December 2017 I received a taxable gift of $78,000 from which nothing was withheld. I know this mu… read more
abci168
abci168
Principal
27 satisfied customers
Under the new tax plan if my federal adjusted gross income
Under the new tax plan if my federal adjusted gross income is $77,230.00 how much are my federal taxes? … read more
Barbara
Barbara
Enrolled Agent, Paralegal
5,129 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x