fishinjack
Apr 4, 2011, 08:14 AM
What Michigan taxes can I expect if I retire and withdraw my 401 K @ age 69 in 2011?
ebaines
Apr 4, 2011, 01:20 PM
1. Federal taxes - the tax rate depends on your total taxable income.
2. State income taxes - assuming the distribution carries a "reason code" of 7 ("normal distribution") on the 1099-R then you can exclude the first $90,240 form MI income tax if filing as Married Filing Jointly ($45,120 for individuals). For someone age 69 I would expect that this is indeed a noormal distribiution. Anything above that amount is taxed at a flat rate of 4.35% just like normal income. If this is not a normal distribution, then you don't get the exclusion. More info here: Taxes - Pension & Retirement Benefits (http://www.michigan.gov/taxes/0,1607,7-238-43513_44135-156348--,00.html)