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revscooter
New Member

How would taking an early withdrawal of $75k from my retirement impact our married-joint income taxes, if our normal combined income is 68k?

 
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DoninGA
Level 15

How would taking an early withdrawal of $75k from my retirement impact our married-joint income taxes, if our normal combined income is 68k?

The taxable portion of your withdrawal would be taxed at your current tax rate when added to your other income.  If you withdraw from the tax deferred retirement account prior to age 59 1/2 (or prior to age 55 from an employer sponsored 401(k) and not separated from the company) you will be assessed a 10% early withdrawal penalty on your federal tax return Form 1040 as a tax liability.  Any taxes withheld from the withdrawal would be entered on your tax return as a tax payment (just like from a W-2).

You can use the TurboTax calculator TaxCaster to get an estimate of the taxes owed or a tax refund.  The calculator may not show the early withdrawal penalty that would be assessed.  Also the calculator is for 2016 but should be close to the 2017 tax rules as written.  Although Congress may change the tax code in 2017 to be retroactive to 1/1/2017.

https://turbotax.intuit.com/tax-tools/calculators/taxcaster/

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2 Replies
DoninGA
Level 15

How would taking an early withdrawal of $75k from my retirement impact our married-joint income taxes, if our normal combined income is 68k?

The taxable portion of your withdrawal would be taxed at your current tax rate when added to your other income.  If you withdraw from the tax deferred retirement account prior to age 59 1/2 (or prior to age 55 from an employer sponsored 401(k) and not separated from the company) you will be assessed a 10% early withdrawal penalty on your federal tax return Form 1040 as a tax liability.  Any taxes withheld from the withdrawal would be entered on your tax return as a tax payment (just like from a W-2).

You can use the TurboTax calculator TaxCaster to get an estimate of the taxes owed or a tax refund.  The calculator may not show the early withdrawal penalty that would be assessed.  Also the calculator is for 2016 but should be close to the 2017 tax rules as written.  Although Congress may change the tax code in 2017 to be retroactive to 1/1/2017.

https://turbotax.intuit.com/tax-tools/calculators/taxcaster/

SweetieJean
Level 15

How would taking an early withdrawal of $75k from my retirement impact our married-joint income taxes, if our normal combined income is 68k?

Remember State taxes as well.
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