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love2clean · Nov 24, 2008, 10:32 AM

I cashed in my IRA earlier this year,it was 11,438,how much in taxes will I have to pay.

AtlantaTaxExpert · Nov 24, 2008, 10:52 AM

We need to know what your other income sources are to give you a complete income tax picture.

You WILL pay at least a 10% Early Withdrawal Penalty unless you qualify for one of the exceptions.

WHY did you cash in the IRA, and what did you do with the money?

love2clean · Nov 24, 2008, 02:22 PM

As of right now I am unemployed,I had to cash in my IRA to pay bills.

AtlantaTaxExpert · Nov 25, 2008, 10:47 AM

Okay, then what have you gotten in unemployment compensation?

Further, what did you receive in pay in 2008 before becoming unemployed?

love2clean · Nov 25, 2008, 11:07 AM

I only worked a couple of months,making about $600.00 and I have drawn no unemployment.

love2clean · Nov 25, 2008, 11:14 AM

I only worked a couple of months making only about $600.00,and did not draw unemployment.

AtlantaTaxExpert · Nov 25, 2008, 03:14 PM

Okay, then I assume that you are NOT married, nor that you have dependents.

You WILL pay $1,144 for the 10% Early Withdrawal Penalty. That is a punitive tax which CANNOT be mitigated by credits or deductions.

Your income is $12,038. Your personal exemption ($3,500) and standard deduction ($5,450) reduce that to taxable income of about $3,088, so you will pay about $309 in income tax on that.

You will probably qualify for some type of Earned Income Credit, but it will NOT be much, so expect your total tax liability to be somewhere between $1,300 and $1,450.