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Mark Taylor
Mark Taylor, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 2309
Experience:  Certified Public Accountant
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What I'd like to know is this. I know it's a bad idea, but I

Customer Question

what I'd like to know is this. I know it's a bad idea, but I need answers. 401K withdrawl.
If I take out 15000 dollars I would like to know how much in Indiana state tax I would owe at year end. We are currently in the 64K gross income range. 25% is federal tax bracket from what I've read. I really want to know what I would owe the state of IN at year end for takings this 15K withdrawl
Submitted: 1 year ago.
Category: Tax
Expert:  Mark Taylor replied 1 year ago.

Hi, my name is Mark. I will be happy to help you with your question.

Expert:  Mark Taylor replied 1 year ago.

How old are you?

Expert:  Mark Taylor replied 1 year ago.

Is $64,000 your total income or taxable income?

Expert:  Mark Taylor replied 1 year ago.

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.

Expert:  Mark Taylor replied 1 year ago.

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)

Expert:  Mark Taylor replied 1 year ago.

Indiana has both a State and a County tax. The state tax rate for 2016 is 3.3%. What county do you live in?

Expert:  Mark Taylor replied 1 year ago.

3.3% would be $495. If the county rate is 2% the tax would be an additional $300.

Expert:  Mark Taylor replied 1 year ago.

Here is a rough estimate assuming a 2% county tax

$3,750 Federal

$1,500 Early Distribution Penalty

$495 State of Indiana

$300 County (Estimate)

Total $6045 (40.3% in taxes)

Expert:  Mark Taylor replied 1 year ago.

The amount drops to $4,545 if you are older than 59 1/2.

Expert:  Mark Taylor replied 1 year ago.

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.

Expert:  Mark Taylor replied 1 year ago.

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