Q&A: How Much Tax on 401(k) Withdrawal?
ฝัง
- เผยแพร่เมื่อ 9 ก.ค. 2024
- Viewer question: How much tax will I owe? I took $100k out of my 401(k), and I earned $70k from work. There was also a 401(k) contribution and some tax withholding. Also, will this affect Medicare premiums (IRMAA)?
Let’s answer this question, as many of you may find yourselves in a similar boat. Learn how to think about the taxes due, and see tools for getting calculations done online. We’ll use some basic 1040 calculators and
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It’s crucial to understand how much you owe and why. By looking at tax rates and different pieces of your income, you can get answers. We'll consider the total income for this couple, as well as tax withholding on their 401(k) distribution. Given the total amount they owe relative to the total amount withheld, the IRS might not need much more.
Their income also appears to be below IRMAA thresholds, assuming they file tax returns jointly as a married couple.
Of course, if this was a client, I’d ask many more detailed questions, and we’d go down some additional paths.
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Remember that online tools may not be accurate, and you need to triple-check everything with reliable sources. This is an oversimplification solely for discussion/example purposes, and is not individualized tax advice. Use at your own risk.
Resources shown here include:
www.dinkytown.net/java/1040-t...
www.taxformcalculator.com/sta...
How much tax do you pay on 401(k) withdrawals: www.approachfp.com/how-much-t...
(Or watch the video: • How Much Tax Do You Pa... )
www.cms.gov/newsroom/fact-she...
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Justin Pritchard, CFP® is a fee-only fiduciary advisor who can work with clients in Colorado and most other states.
IMPORTANT:
It's impossible to cover everything you need to know in a video like this. The only thing that's certain is that you need more information than this. Always consult with a CPA before making decisions or filing a tax return. This is general information and entertainment, and is not created with any knowledge of your circumstances. As a result, you need to speak with your own tax, legal, and financial professional who is familiar with your details. This video is not a substitute for individualized, personal advice. Please verify with your plan administrator when employer plans are involved. This information may have errors or omissions, may be outdated, or may not be applicable to your situation. Investments are not bank guaranteed and may lose money. Opinions expressed are as of the date of the recording and are subject to change. “Likes” should not be considered a positive reflection of the investment advisory services offered by Approach Financial, Inc. The Comments section contains opinions that are not the opinions of Approach Financial, Inc., and you should view all comments with skepticism. Approach Financial, Inc. is registered as an investment adviser in the state of Colorado and is licensed to do business in any state where registered or otherwise exempt from registration.
I've rolled all 401k's into IRA's.
* No administrative costs
* No mandatory 20% withholding
* Freedom of investment options
Now roll it into a Roth, lol.
Do a video on withdraw from a IRA
You did effective tax rate correctly It's meant to capture tax rate based on all income, not just taxable.
Thank you, Justin! Great video!
Very informative thank you.
Very helpful video. I enjoy these "what if" type of videos. Maybe I can come up with a questioin or two myself. Thanks for doing this.
Great video. Loved the resources. Well executed.
Thanks for Dinkytown
Wasn’t there any federal withholding on the base income? This would likely make them getting a refund
Yes, if the tax withholding at work was more than a few hundred dollars (as it likely was), then you would expect to see a refund. It probably would have been good to add that to the video. Next time!