I haven't done the withdraw yet but I am trying to understand the tax implications in withdrawing 200k out of my IRA.
For ease of the scenario, let's just assume the only income for the year would be the 200k early withdrawal from my IRA (as I am not 59.5).
The company automatically withholds 20% for taxes so 40k would be withheld upfront.
I currently file as head of household with 2 dependents ( 8 and 1).
When I put the earlywithdrawal and tax withheld into taxcaster for an estimation of taxes, it says that I would get a refund of $5,974.
I am aware that taxcaster does not compensate for the 10% early withdrawal penalty which in this case would be 20,000. So with that said that means I would owe about $14k in taxes that year. Does that sound like I am calculating it all correctly?
Is that the correct way to estimate the taxes for the year including the penalty?
