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I had to take an early withdrawl from my IRA/401K account; How do I figure what the taxes will be. I might owe for the 1st time and I am worried. I live in Wisconsin
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I had to take an early withdrawl from my IRA/401K account; How do I figure what the taxes will be. I might owe for the 1st time and I am worried. I live in Wisconsin
I assume that Wisconsin taxes withdrawls from IRA's and 401(k)'s in a similar fashion as the federal government does, though at different tax rates, of course.
If you have no "basis" in the IRA/401(k) - most people probably don't - then the entire distribution will be taxed at your highest marginal income tax rate as "ordinary" income. As a rough approximation you might look at your last year income tax returns and see what tax bracket your taxable income placed you in, (e.g., 10%,15%, etc.) and apply those percentages to the amount of withdrawals. Of course if your income is markedly higher or lower this year then those tax brackets might not apply; there's just no way to give you a "general" answer here. You could also use TurboTax's "TaxCaster" calculator - https://turbotax.intuit.com/tax-tools/calculators/taxcaster/ - to get an estimate of the federal tax for the year.
The early withdrawal aspect will then add a 10% penalty for the federal income tax. It looks like the state of Wisconsin has an early withdrawal penalty of about 3.3%.
Tom Young
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I had to take an early withdrawl from my IRA/401K account; How do I figure what the taxes will be. I might owe for the 1st time and I am worried. I live in Wisconsin
I assume that Wisconsin taxes withdrawls from IRA's and 401(k)'s in a similar fashion as the federal government does, though at different tax rates, of course.
If you have no "basis" in the IRA/401(k) - most people probably don't - then the entire distribution will be taxed at your highest marginal income tax rate as "ordinary" income. As a rough approximation you might look at your last year income tax returns and see what tax bracket your taxable income placed you in, (e.g., 10%,15%, etc.) and apply those percentages to the amount of withdrawals. Of course if your income is markedly higher or lower this year then those tax brackets might not apply; there's just no way to give you a "general" answer here. You could also use TurboTax's "TaxCaster" calculator - https://turbotax.intuit.com/tax-tools/calculators/taxcaster/ - to get an estimate of the federal tax for the year.
The early withdrawal aspect will then add a 10% penalty for the federal income tax. It looks like the state of Wisconsin has an early withdrawal penalty of about 3.3%.
Tom Young
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I had to take an early withdrawl from my IRA/401K account; How do I figure what the taxes will be. I might owe for the 1st time and I am worried. I live in Wisconsin
<a rel="nofollow" target="_blank" href="https://www.revenue.wi.gov/pubs/pb126.pdf">https://www.revenue.wi.gov/pubs/pb126.pdf</a>