- Mark as New
- Bookmark
- Subscribe
- Subscribe to RSS Feed
- Permalink
- Report Inappropriate Content
Considering withdrawing out of my IRA account. Trying to figure out how much tax I should take off (I'm in NE, under 59yrs). I don't want to owe next year. Help, please?
- Mark as New
- Bookmark
- Subscribe
- Subscribe to RSS Feed
- Permalink
- Report Inappropriate Content
Retirement tax questions
Normally you would be taxed at your marginal tax rate for both federal and state income tax and have a 10% federal tax penalty on the amount withdrawn. However if the withdrawal is COVID related you can return the withdrawal within 3 years and avoid those tax consequences. See this article:
- Mark as New
- Bookmark
- Subscribe
- Subscribe to RSS Feed
- Permalink
- Report Inappropriate Content
Retirement tax questions
i have an amount in mind to take out next from my IRA.
I know what my other income is.
I do a trial tax return for 2019 with a 1099-R showing that amount.
I know exactly how much tax it is going to cost me .
- Mark as New
- Bookmark
- Subscribe
- Subscribe to RSS Feed
- Permalink
- Report Inappropriate Content
Retirement tax questions
If this is not COVID-related:
You can use the TaxCaster or IRS calculator to estimate the tax you will owe. It will likely be between 25% and 34%, depending on your total income, and including the 10% penalty for early withdrawal.
https://turbotax.intuit.com/tax-tools/calculators/taxcaster/
https://www.irs.gov/individuals/tax-withholding-estimator
NE's state income tax rate is 6.84%, there is no state tax penalty for early withdrawal.
If you can certify the withdrawal is due to a COVID-related hardship, you have additional options:
- You don't have to pay the 10% penalty for early withdrawal,
- You can spread the income tax out over 3 years.
- You can put the money back within three years and get any tax you paid refunded to you.