if i received a death benefit when my parent passed away, how much tax will i owe, and can i pay it now?
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The percentage of tax will be based on your total income from all sources.
20% is the standard withholding, you can use the refund calculator to make sure it is enough
https://turbotax.intuit.com/tax-tools/calculators/taxcaster/
If it is a death benefit from a life insurance policy then it is not taxable. If it is from a retirement plan it is taxable and taxes should be withheld when the money is disbursed to you.
Hi again,
it was from a retirement plan. Do you know the % ill have to pay? (10% - 20%)?
20% was withheld when it was disbursed, so im good right?
The percentage of tax will be based on your total income from all sources.
much appreciated! Thanks!
20% is the standard withholding, you can use the refund calculator to make sure it is enough
https://turbotax.intuit.com/tax-tools/calculators/taxcaster/
It depends. If the death benefit was an inherited traditional IRA, you will most likely pay income taxes at your ordinary tax rate on the distribution. (Not applicable to a Roth IRA, as long as the Roth IRA was open for at least five years.) Federal tax law requires withholding of 20% of the taxable portion of the lump sum benefit paid. If your ordinary income tax rate is more than 20%, you will pay the difference in taxes. It may help to use a Tax Calculator such as TurboTax's Tax Caster tax calculator to determine how much you will, or will not, owe when you file your taxes.
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