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leishar
Level 1

Taxes, Profit Sharing Withdraw to pay off mortgage.

I started my retirement in March of this year. I am at full retirement age, born 1954. My question is how much tax should I expect to pay on 80K I took from my companies profit sharing to pay off my mortgage?  If I include this amount as earned income my gross income for the  year will be approximately 110K.

2 Replies
mfields2
Employee Tax Expert

Taxes, Profit Sharing Withdraw to pay off mortgage.

Money taken from your profit sharing plan would be fully taxable as income, since it has never been taxed.  You did not mention your filing status or state, but I can make a few observations:

 

1) Your social security benefit will be taxed at 85% of the total amount of social security benefit, based on your overall income outside of social security.

 

2) A quick calculator for determining your taxable income would be this one:  https://smartasset.com/taxes/income-taxes .  Include 85% of your total social security benefit amount as part of your taxable income when you make the calculation.  For instance, if your total income is $110k and you are Single, your federal income tax calculates to $17,504 (with the standard deduction).  If you would like a more accurate calculator, use our TaxCaster:  https://turbotax.intuit.com/tax-tools/calculators/taxcaster/

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leishar
Level 1

Taxes, Profit Sharing Withdraw to pay off mortgage.

I am single living in Colorado.   80K  profit sharing 22K Social Security 9k earned income for 2021 

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