My husband Paul was permanently laid off from his job in December 2005, at the age of 60. He has approximately $130,000 in his 401(k) plan. He worked for the company for 20 years and is fully vested in the plan. I am his wife and am 51 years old.

Neither of us is currently employed. For personal reasons, we must withdraw $80,000 cash out of the plan.

What type of taxes and how much of each must we pay when we withdraw the money? We plan to withdraw the money in a matter of days.

Thank you for your help in this matter.

Nancy Ganz

AtlantaTaxExpert

Nacy:

Since your husband is over the age if 59.5 years, you wold pay normal income taxes. If the $80K is your only income for the year, the tax bill will be $9,236.

Nancy Ganz

THANK YOU VERY MUCH! Nancy 2/6/906

valarie1957

what percentage did you use to calculate this figure of $9,236.

ebaines

It's not a straight percentage. I suspect the calculation came from the tax tables for a married couple, with $80K adjusted gross income in 2006 an assuming the standard deduction and no other dependents. This couple would have been in the 25% marginal tax bracket