Ask Experts Questions for FREE Help !
Ask
    Nancy Ganz's Avatar
    Nancy Ganz Posts: 2, Reputation: 1
    New Member
    		  
    #1

    Feb 5, 2006, 05:53 PM
    401k Distribution
    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's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #2

    Feb 5, 2006, 08:22 PM
    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's Avatar
    Nancy Ganz Posts: 2, Reputation: 1
    New Member
    		  
    #3

    Feb 6, 2006, 09:45 AM
    Quote Originally Posted by 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.
    THANK YOU VERY MUCH! Nancy 2/6/906
    valarie1957's Avatar
    valarie1957 Posts: 1, Reputation: 1
    New Member
    		  
    #4

    Oct 30, 2009, 07:28 AM
    What percentage did you use to calculate this figure of $9,236.
    ebaines's Avatar
    ebaines Posts: 12,131, Reputation: 1307
    Expert
    		  
    #5

    Oct 30, 2009, 08:56 AM

    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
Not your question? Ask your question View similar questions
 

Question Tools Search this Question
Search this Question:

Advanced Search

Add your answer here.


Check out some similar questions!

Need legal advice with 401K distribution $$ [ 7 Answers ]

I have recently started the rollover process from my former employers 401k/profit sharing plan (MassMutual) to my current one (Fidelity). The problem that I am having is the "vested" amount that is reflected on my statements is showing 80% and the amount that they paid out was only 60%. I have...

How to fill in tax forms on 401k distribution [ 3 Answers ]

g'day I'm trying to fill out the 2005 tax forms. Each year I fill in a 2555EZ form as I live in Australia. I then transfer the total earned income amount to the 1040 form (it is zero as I'm now a student). Have done this for a few years and there are no problems. Last year I cashed in half...

401K Distribution penalty [ 3 Answers ]

I had no choice but to take a hardship withdrawal from my 401K after being let go by my employer. It was a difficult time also having been displaced by a house fire and having to rebuild our home and pay for a portion of our alternate living expenses not covered by the insurance company. Being a...

Very complicated 401K distribution question - help! [ 5 Answers ]

This one stumped my accountant... My husband had a 401K distribution when his company folded, it was a rollover check made out to his next company's 401K, FBO him. That company folded before the check was deposited, and the 401K was closed. The 401K plan administrator has been disbanded as...

LLC distribution [ 0 Answers ]

There is a Limited Liability Company in which its partners receive a monthly salary if the funds are available. If the company received a large sum of money and the partners decided to take a distribution from the company according to their ownership percentage, what account should be debited? ...

View more questions Search