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    smiles8231's Avatar
    smiles8231 Posts: 2, Reputation: 1
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    #1

    Nov 16, 2006, 10:58 PM
    401k distribution? And state tax
    How much would you suggest that I withhold for state taxes on a 12,400 distribution? I live in New York and would prefer not to get dinged at the end of the year. It can be either a percentage or dollar amount.

    Thank you for any suggestions!
    kp2171's Avatar
    kp2171 Posts: 5,318, Reputation: 1612
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    #2

    Nov 17, 2006, 12:53 AM
    Not an expert on this topic so you'll want to wait for better advice.

    Doesn't this depend on your tax bracket? Is the 12400 the amount you are receiving after penalty and fed taxes or is it the amount in the plan before distribution? The state income tax will be assessed on the amount that was in the plan before distribution, taxed (I believe) at whatever rate you are normally taxed at, assuming the distribution doesn't bump you up.

    Now ill step aside and let the experts agree or correct.
    smiles8231's Avatar
    smiles8231 Posts: 2, Reputation: 1
    New Member
    		  
    #3

    Nov 17, 2006, 05:43 AM
    Quote Originally Posted by kp2171
    not an expert on this topic so youll want to wait for better advice.

    doesnt this depend on your tax bracket? is the 12400 the amount you are receiving after penalty and fed taxes or is it the amount in the plan before distribution? the state income tax will be assessed on the amount that was in the plan before distribution, taxed (i believe) at whatever rate you are normally taxed at, assuming the distribution doesnt bump you up.

    now ill step aside and let the experts agree or correct.

    Thanks. The 12,400 is before taxes. I will poke around the NYS Dept of Taxation and Finance web site to see what tax bracket I fall in. Thanks again!
    ScottGem's Avatar
    ScottGem Posts: 64,966, Reputation: 6056
    Computer Expert and Renaissance Man
    		  
    #4

    Nov 17, 2006, 07:21 AM
    What you need to do is add the amount to your income for the year, then calculate your total tax and compare that to the amounts being withheld from your salary. The difference is what you put aside.

    Note also, that the 20% withheld for Fed tax is just an estimate and may not be enough to cover your actual tax liability.

    Was this a withdrawal or a distribution? Has the 60 day window past where you can roll over into an IRA or another company plan? If it hasn't I would HIGHLY recommend that you do so.
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #5

    Nov 17, 2006, 08:10 PM
    I agree with Scott.
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