topic QUESTION about my tax bracket in Deductions & credits

QUESTION about my tax bracket

JustBill — Mon, 23 Nov 2020 01:52:19 GMT

i am 64 was laid off. Still going to find another job. I have a mortgage on a townhouse i own. I owe $200k , if i pay that off from an IRA i think that will be seen as an income. will i pay the tax rate for fed and state as i did when i had a job or will that put me in a whole new higher tax bracket like i am making $200k a year.

Re: QUESTION about my tax bracket

Critter-3 — Mon, 23 Nov 2020 02:04:13 GMT

If you take out $200K all in one tax year then that is added to your other income to determine your tax rate on the return. If you can maybe splitting it up between more than one tax year to reduce the taxes would be wise. And think carefully about using the IRA ... say the IRA is averaging 5% per year in income/equity and you are paying 3% in mortgage interest then paying off the mortgage may not be a good idea. Seek council from a local financial planner to explore all your options before you deplete an IRA.

Re: QUESTION about my tax bracket

Opus 17 — Tue, 24 Nov 2020 23:54:00 GMT

If this is a traditional IRA, you will pay regular income tax on your total income. Depending on your other income, it will likely be 24%.

Because your investment growth is probably more than your mortgage interest rate, it may be more sensible to withdraw a small amount to make a few months worth of payments, and see if you get another job, and leave the rest of the IRA alone and see what happens.