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Depends whether your 401(k) withdrawal is from Traditional 401(k) or Roth 401(k). It also depends on your age and the reason of withdrawal.  It is taxed as Ordinary income and early withdrawal may incur a 10% penalty on the federal return in addition to regular tax.    Traditional 401(k): Your contributions to traditional 401(k) are with pre-tax dollars, therefore, all withdrawals are taxed as ordinary income based on your tax bracket.  If you withdraw before age 59 1/2, you will be subject to an additional 10% penalty. (This penalty can be avoided in certain situations). Any employer matching contributions are treated as Traditional 401(k) and are taxed on withdrawal.  Roth 401(k): Your contributions to Roth 401(k) are with after-tax dollars, and your money grows tax-free.  Withdrawals are not taxed in retirement if you meet the requirements for a 'qualified withdrawal'.  A distribution is considered qualified if you're at least age 59 1/2 and have held the account for at least five years.  For CA residents, 401(k) withdrawals are subject to both federal and state income taxes.    Thank you @Walker69 for your participation in this event.   See this for additional info:  Retirement topics - Exceptions to tax on early distributions

Short term capital gains will be taxed as ordinary income.   Long-term capital gains rates can be found in the link: 2025 Long-Term Capital Gains Tax Rates (for filing in 2026)    Add the amount you plan to withdraw from your traditional IRA to your other sources of income (without long-term capital gains) to produce gross income. If you are filing single, subtract the 2025 standard deduction of $15,750 from the amount you calculated to determine your estimated taxable income.   Compare your figure to the table in the link above. This should allow you to estimate an amount you can convert from your traditional IRA to a Roth IRA before you move up into the 15% Long-Term capital gain bracket.    This assumes you have no gains from sales that apply to the collectibles rate.

@xmasbaby0 Thank you for your help for the TurboTax event today. In the partner list, they include Chase but no Citibank, right? Currently I did not see 1099R at my side. Usually, will the bank mail the 1099 tax form to me?

To avoid penalties, you must meet one of these safe harbor thresholds: Pay at least 90% of your current year’s tax liability, or Pay 100% of your prior year’s tax liability (or 110% if your AGI was over $150,000). Withholding from pensions, 457(b), or Social Security is treated by the IRS as if it were paid evenly throughout the year, regardless of when it was withheld. This means you can adjust withholding later in the year and still avoid penalties.    The IRS Tax withholding estimator will calculate your projected total tax liability for the year and the total dollar amount of tax that needs to be withheld from all sources combined.    Adjust Withholding Forms from different sources. If one pension allows flexible withholding, you can increase it to cover taxes from all sources. The Social Security Administration only allows you to withhold at specific flat percentages (7%, 10%, 12%, or 22%). If you need to withhold a small, specific amount, use this form W-4V. You should revisit your withholding mid-year and again in Q4. If needed, make a catch-up withholding from a large distribution or pension payment.   @user17611601864 Hope this helps!!      

The decision on when to stop working is a complex one, and is made even more complex when you consider the tax implications of when to collect social security, what retirement accounts, after-tax investment accounts or savings accounts to tap into, etc.   There is no one-size-fits-all answer to your question.  You certainly can start taking distributions from your IRA - assuming all your contributions to the IRA were pre-tax contributions, then the entire amount of any distributions you take will be considered taxable income to you.  When it comes to the decision to collect social security, there are a ton of factors to consider before proceeding.   Based on your comment that you are 64 years old, your full retirement age for Social Security Benefits would be age 67 (if born in 1960 or later, full retirement age is 67; if born before then, full retirement age is somewhere between age 66-67, depending on the year of your birth).  That doesn't mean you have to wait until age 67 to start collecting social security - you can start collecting as soon as age 62. However, collecting social security "early" means that the amount you receive each month will be lower than if you waited until your Full Retirement Age. Likewise, you can choose to defer taking social security even when you hit full retirement age.  For every year you delay benefits past full retirement age, up to age 70, your monthly benefits can permanently increase by about 8% per year.   Additionally, there is the consideration of spousal benefits, i.e. collecting social security based on your spouse's work history, instead of your work history. Under spousal benefits, the maximum you can receive is half of the amount your spouse would receive if they claimed at their Full Retirement Age. If your spouse is deceased, you can receive up to 100% of their benefit, depending on your age at the time you claim the survivor benefit.   How does all that work in your situation? The answer is dependent on a lot of factors, as you can guess from the above information.  I recommend you contact a local qualified financial advisor planning specialist or the Social Security Administration and discuss your specific situation to understand the various options and ultimately pick the one that is best suited for you.

In addition, your dividends can be used to fund a donor-advised fund (DAF).  This approach might be appealing if you value the long-term planning flexibility offered by a DAF. Separately, you could fund a DAF with cash/dividends or appreciated stock to receive an immediate tax deduction while planning for future charitable gifts. This strategy can be especially advantageous in years when your income is high. While DAFs offer significant benefits, there are some potential disadvantages to consider. For example: You may lose direct control over donated assets, as the sponsoring organization makes the final decisions on grants. Various fees charged by the sponsoring organization can reduce the total amount available for charitable purposes. Contributions to a DAF are irrevocable, meaning funds cannot be withdrawn once donated. Funds can potentially remain in the DAF for extended periods without being distributed, delaying their impact.  

Did all of you forget to enter your SSA1099 that was mailed to you by Social Security in January?   Or....did you actually enter the SS benefits but make a mistake after entering it?   The screen after you enter your SSA1099 asks if you had income in a foreign country in 2024--if you skipped that screen or answered it incorrectly, that messed up the taxability of your SS.

Only capital gain (Income) is included in MAGI calculation.   Thanks for participating in TurboTax's Ask the Expert event today. I hope this information was helpful! **Please cheer or say thanks by clicking the thumb icon in a post **Mark the post that answers your question by clicking on "Mark as Best Answer" Regards, TurboTax Expert

If you have not yet e-filed, you can still make changes.   You might need to click on Add a State---you do not really have to add a state return, but that trick will let you back in to the software to make changes or add information.   If you do not e-file by the end of October you will need to file your 2024 return by mail.   When you mail a tax return, you need to attach any documents showing tax withheld, such as your W-2’s or any 1099’s.  Use a mailing service that will track it, such as certified mail so you will know the IRS/state received the return.   Federal and state returns must be in separate envelopes and they are mailed to different addresses.  Read the mailing instructions that print with your tax return carefully so you mail them to the right addresses.  

The decision to maintain separate 401(k) accounts or combine them is a personal one. Key factors to consider include the expense ratios, plan fees, and investment options available in each plan. While most brokers can provide Required Minimum Distribution (RMD) amounts, it's important to note that RMDs must be withdrawn separately from each 401(k) plan, unlike IRAs where the total RMD can be taken from a single account.   Thanks for participating in TurboTax's Ask the Expert event today. I hope this information was helpful! **Please cheer or say thanks by clicking the thumb icon in a post **Mark the post that answers your question by clicking on "Mark as Best Answer" Regards, TurboTax Expert