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| *The Commerce Journal>>>Investing |
How much are you taxed for a 401K withdrawal under age 59? |
How much are you taxed for a 401K withdrawal under age 59? A similar questions was asked a couple of days ago. If you are allowed to withdrawl money prior to retirement age (and you may not be able to, check the plan details), you will record all money taken out in line 16d of the Earnings section of your 1040. The tax paid depends on your tax rate, so there is no single answer for the question. A bunch - figure on about 25% of the withdrawal (as it's a function of both Federal and State taxes). Your marginal rate plus 10% plus any state tax. So if you are in a 25% bracket your federal tax and penalty would be 35%. If you take enough to get to the next bracket it would be even more. So if you have a state income tax it would be in addition to the 35%. Also they normally only withhold 20% so you would need to come up with the rest of the tax. 10% penalty for early withdrawal plus the gross amount withdrawn is taxed as ordinary income. Figure to lose around 40% of the gross withdrawal amount. 10% plus the taxes In general, you're taxed your marginal tax rate, plus any state taxes, plus a 10% penalty tax. If you want to know more about getting money out of your 401(k), check out http://www.plannerconnect.com/retirement... |
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