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Tax2018
New Member

How to estimate 403b early withdrawal 2018 taxes and penalty?

Is there a way to estimate 403b early withdrawal 2018 penalty and taxes? Can payments be made now?

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Carl
Level 15

How to estimate 403b early withdrawal 2018 taxes and penalty?

The penalty will be a flat 10% of the amount withdrawn early.

As for the taxes on it, that will depend on your total household income for the entire year and what tax bracket that puts  you in. Note also that the early withdrawal counts as household income in the year you withdraw it, and will increase your AGI. Take a look at the 2018 tax brackets chart at https://www.forbes.com/sites/robertberger/2017/12/17/the-new-2018-federal-income-tax-brackets-rates/

So if you project the early withdrawal will put you in the 32% tax bracket, you can go ahead and pay the IRS 42% of the withdrawn amount. (32% for the taxes, 10% for the penalty).  You can pay all or any portion of it directly to the IRS at http://www.irs.gov/directpay. Make sure you print your receipt and keep it for your records when/if you do that.

Also, if your state taxes personal income then your state would most likely impose taxes on the withdrawal as well as an early withdrawal penalty also. What those amounts would be for your state, depends on which of the 37 states you're in that tax personal income.

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