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I am out of work and looking to withdrawl some of my

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I am out of...

I am out of work and looking to withdrawl some of my retirement money to get by. I live in Wisconsin. Would it be smart to transfer my money from my Traditional IRA to my Roth IRA first and then withdrawl from the roth or just take money from the traditional one? Also, what federal and state taxes should I make sure to have taken out so that I don't owe when I file my taxes

Accountant's Assistant: The Accountant will know how to help. Is there anything else the Accountant should be aware of?

No that is about it

Submitted: 4 months ago.Category: Tax
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12/2/2017
Tax Professional: Lane, JD, CFP, MBA, CRPS replied 4 months ago
Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 14,011
Experience: Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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Hi. My name's Lane.

...

Once the dollars come out of the IRA "shell," so to speak, the money is added to taxable income.

...

If you pull 20,000, it will be as if you have a side job paying 20,000. And those dollars will be taxed in whatever tax bracket those additional dollars fall. Here are the tax brackets for a single filer for example:

...

Single Filing Status

Single 2017 Tax Brackets

...

Taxable Income ........ Tax Bracket:

$0 - $9,325 .................. 10%

$9,326 - $37,950 .......... 15%

$37,951 - $91,900 ........ 25%

$91,901 - $191,650 ...... 28%

$191,651 - $416,700 .... 33%

$416,701 - $418,400 .... 35%

$418,401+ ................... 39.6%

...

So lets say that your other taxable income for the year was $10,000, then the 20,000 would all be taxed at 15%.

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Then if you are under age 59 and 1/2, there will be the additional 10% early withdrawal penalty tax.

...

If you roll to the roth, there's no difference. once the dollars come out of the IRA, so sorry, it's taxable income.

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Customer reply replied 4 months ago
when I withdrawl the money I should make sure that my tax percentage is at (due to my other income this year) 25% for the state of wisconsin and then 10% for federal in order to make sure I don't owe anything when I file my taxes?
Tax Professional: Lane, JD, CFP, MBA, CRPS replied 4 months ago

Depending on how much you pull Wisconsin rates are also progressive

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For example $14,820 through $29,640 are at 5.84% ... then $29,640 through $326,330 are at 6.27%

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but on the FEDERAL side you're looking at 10, 15 or 25% based on your total income PLUS another 10% if you're under 59 and 1/2

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For example, using the example above you'd be looking at 15% (+ 10% federal if you're under 59 and 1/2) PLUS another 5.84 % for state.

...

So if you're under age 59 and 1/2 and at the 15% federal bracket, that's 15 + 10 + 5.85 = 30.85% combined federal and state tax

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Tax Professional: Lane, JD, CFP, MBA, CRPS replied 4 months ago

If you'd like to tell me (1) what your total income is before the IRA withdrawal, (2) how you're taking out, and (3) your age, I can tell you the exact amount to withhold for Federal and for state (the form you'll use, will ask for both federal and state withholding).

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Tax Professional: Lane, JD, CFP, MBA, CRPS replied 4 months ago

But if this has helped, and you DON’T have other questions … I'd appreciate a positive rating, using the stars on your screen, and then clicking “submit" – That’s the only way I’ll be credited for the work.

...

But again, if you need more on this, please let me know.

Lane

I hold a law degree (J.D.), with concentration in Tax Law, Estate law & Corporate law, an MBA in finance, a BBA, and CFP & CRPS (Chartered Retirement Plans Specialist) designations, as well - I’ve been providing financial, Social Security/Medicare, estate, corporate, non-profit, and tax advice, since 1986

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Tax Professional: Lane, JD, CFP, MBA, CRPS replied 4 months ago
Hi - just checking back in ... did my answer help?
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