topic Thanks in Retirement tax questions

In order to avoid a higher tax bracket as much as possible, can this distribution be spread over multiple years as income?

dschaeffer218 — Tue, 04 Jun 2019 18:47:36 GMT

As a retiree I need to have a low 6 figure 401K pre-tax distribution in December to close on a house. In order to avoid a higher tax bracket as much as possible, can this distribution be spread over multiple years as income?

Withdrawals from a tax deferred retirement account are re...

DoninGA — Tue, 04 Jun 2019 18:47:38 GMT

Withdrawals from a tax deferred retirement account are reported only in the year of withdrawal, no portion of the withdrawal can be reported in future tax years.

If you have sufficient funds in the 401(k) or in an IRA,...

dmertz — Tue, 04 Jun 2019 18:47:39 GMT

If you have sufficient funds in the 401(k) or in an IRA, you could take an additional distribution from the 401(k) or IRA in January 2018 and use that money to fund a partial rollover to an IRA of the December 2017 401(k) distribution, effectively transferring some of the income to 2018. The rollover would have to be completed by the 60th day following the 2017 distribution from the 401(k). Doing so might drop some of the income to a lower tax bracket.

Thanks

dschaeffer218 — Tue, 04 Jun 2019 18:47:40 GMT

Thanks

There is no income averaging. You can check with the plan...

Opus 17 — Tue, 04 Jun 2019 18:47:42 GMT

There is no income averaging. You can check with the plan and see if they will let you borrow money. But if you take a large distribution it will be taxable.

Cashing in a retirement plan is an expensive way to buy a...

SweetieJean — Tue, 04 Jun 2019 18:47:43 GMT

Cashing in a retirement plan is an expensive way to buy a house.

See similar discussion here: https://ttlc.intuit.com/questions/4135098-does-it-make-sense-to-pay-off-our-mortgage-with-retirement-savings-right-now-we-are-living-paycheck-to-paycheck">https://ttlc.intuit.com/questions/4135098-does-it-make-sense-to-pay-off-our-mortgage-with-retirement-savings-right-now-we-are-living-paycheck-to-paycheck</a>