I am 64 years old, will make same income this year as next. Does it make any difference if I take $5000 out of my 401k this year or next as far as taxes?

Forum|Forum|6 months ago
December 6, 2025
3 replies
0 views

No text available

TurboTax Online

SteamTrain

Level 15

@cnj083

Well, if a traditional 401k, and all your other income is exactly the same as last year, then that 5k would be taxed at approximately your marginal tax bracket %. So, if you are normally in the 22% tax bracket, that might add $1100 to your tax liability .

Of course, the 401k provider may have some automatic tax withholding as a part of any distribution, so you should ask them about that. IF they give you a choice as to how much to withhold, you could designate a % about whatever % tax bracket you were in last year, and that wouldn't be unreasonable.....though you might not need that much withheld if you normally get a refund.

____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*

SteamTrain

Level 15

@cnj083

But then, if you are 65 next year, you might be eligible for the extra $6k income deduction for a single senior citizen. (12k if married/MFJ and both are 65 or older & not allowed for MFS)

That might offset the 5k distribution when taken next year instead....IF you are eligible for it.

It phases out for MAGI starting/ending at:

Single: $75k - to $175k

MFJ: $150k - to -$250k

____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*