retirement account withdrawal taxes
If we withdrawl from a roth 401k for ex. 1,000 with a 10% federal tax and 0% state tax.
How much does this cost when filing taxes?
I want to know does this mean as a penalty , is it $100 on my taxes and raises my income.
Also for a non roth ira.
Terry Says
There is no tax — federal or state – -on a withdrawal from a Roth IRA that has been in existence for at least 5 years. If you have held the Roth IRA for less than 5 years, you’ll pay taxes on gains withdrawn.
On the other hand, a traditional IRA does have a 10% penalty for money withdrawn before age 59-1/2. AND you’ll pay ordinary income taxes on money withdrawn from a traditional IRA, no matter what your age. The withdrawal is added on to your ordinary income that year and taxed at your marginal (top) rate.
