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Last year I withdraw 87,031.79 $ from my money market/IRA…

Last year I withdraw 87,031.79...
Last year I withdraw 87,031.79 $ from my money market/IRA account and that was my only income for the year 2017, how much I have to pay the IRS taking in consideration that I'm, not 59 and a half yet?
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Answered in 4 minutes by:
3/12/2018
Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 14,894
Experience: Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
Verified

Hi. My name’s Lane.

...

I hold a law degree, 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.

Bear with me just a moment.

I'm reviewing your question now and typing up my reply.

...

I'll post that in just a few moments. Then, let me know if you have further questions on this.

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Hi Robin ... can you tell me how you filed and what your other income for the year was?

...

This is taxed as ordinary income (and will be on top of any other income earned for the year) and those rates are determined by how you file (single, married filing jointly, etc)

...

SO if you can tell me how you file and your other income for the year I can calculate the rate (and then of course, we'll have to add the additional 10% early retirement penalty)

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Customer reply replied 5 months ago
i have no other income wat so ever for the last year , this was my only income as i am not working right now , i didnt file yet , i am married but my husband still waitting for his green card so he did not make any income too

OK You can either file as married filing separately. OR Married filing jointly (which, if he has no income at all, worldwide, then you'll get a much better tax rate).

...

If you file jointly, you'll have to send in a w-7 with the return so htey can assign him an ITIN while waiting for the green-card and Social Security number.

...

here's Married filing jointly

...

Estimated Tax Analysis

Gross income$87,031

Qualified plan contributions-$0

Adjusted gross income=$87,031

Standard/Itemized deductions-$12,700

Personal exemptions-$8,100

Taxable income=$66,231

Tax liability before credits$9,002

Child tax credits-$0

Estimated tax liability=$9,002

...

Then there's the additonal 10% penalty for the early withdrawal so

9002 + (.1 x 87031) = 17705

...

Now bear with me another sec and I'll show you married filing separately

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Estimated Tax Analysis

Gross income$87,031

Qualified plan contributions-$0

Adjusted gross income=$87,031

Standard/Itemized deductions-$6,350

Personal exemptions-$8,100

Taxable income=$72,581

Tax liability before credits$13,884

Child tax credits-$0

Estimated tax liability=$13,884

..

But again, the penalty, so

13884 + (87013 x .1) = 22585

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Customer reply replied 5 months ago
he did not have any income at all as he been living here with me for the last year , and soryr i didnt mention that before , but i have a 6 years old stepdaughter with him will it make any diffrence int he calculations ? and which is better less payment way to file ?

As you can see above, Married filing jointly is much better (just as little more trouble, as you have to send in the W-7 with the return)

...

And give me just a moment and I'll add in the dependent credit

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Summary Table

Estimated Tax Analysis

Gross income$87,031

Qualified plan contributions-$0

Adjusted gross income=$87,031

Standard/Itemized deductions-$12,700

Personal exemptions-$8,100

Taxable income=$66,231

Tax liability before credits$9,002

Child tax credits-$1,000

Estimated tax liability= .... $8,002

Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 14,894
Experience: Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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Lane
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