Have a Tax Question? Ask a Tax Expert
Hi, my name is Mark. I will be happy to help you with your question.
How old are you?
Is $64,000 your total income or taxable income?
If you are under 59 1/2 there a penalty for an early distribution of 10% in addition to the taxes the income tax that you will pay. There are some exceptions is the money is used for education expenses, 1st time home purchase, medical expenses, to pay an IRS levy.
Assuming that you are in the 25% tax bracket the federal amount would be $3,750 with a potential penalty of $1500 (if an early distribution applies)
Indiana has both a State and a County tax. The state tax rate for 2016 is 3.3%. What county do you live in?
3.3% would be $495. If the county rate is 2% the tax would be an additional $300.
Here is a rough estimate assuming a 2% county tax
$1,500 Early Distribution Penalty
$495 State of Indiana
$300 County (Estimate)
Total $6045 (40.3% in taxes)
The amount drops to $4,545 if you are older than 59 1/2.
Some plans allow for loans from 401k accounts? If this is an option this may be a better alternative. There would be no taxes unless the loan is not paid.
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