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How much will I have to set aside to pay the IRS
for cashing out my 401K this year.
I already paid the 10% penalty and the State tax.
Let me just say that I specified how much was to be withheld and didn't
get any advise. So I went with the 10%
penalty and the 2% for state but there is also up 40% in "regular" taxation" coming at me at tax time, right?
I will probably gross around 60K
this year total income and have one
child.
3 Answers
- StephenWeinsteinLv 71 decade agoFavorite Answer
First, you paid an estimate of the state tax. You cannot know that you paid the entire state tax, because you cannot tell how much the state tax will be until your total income is determined.
Second, the federal tax (not including the penalty) is at the same rate as ordinary income, which varies from 0%-35%, depending on the amount of your other income.
- Helen, EA in PALv 51 decade ago
You had taxes withheld. You did not PAY anything.
If your tax bracket is 15%, then you will owe at least 25% (taxes plus penalty) of the initial amount in taxes. This is not including your state tax.
The trustee probably withheld 20% for federal taxes, so you are already 5% in the hole.
Helen, EA in PA
- 1 decade ago
There is no way of answering your question without more detailed info. Depending on the value of the 401K it could put you into another tax bracket. Be safe and be prepared to pay. Also, I would seek help when filing my taxes. You may qualify for an exclusion to the penalty if you meet certain criteria.
