I'm getting divorced my husband offed a 200.000 401k how much in taxes will i pay?

Answer 1

If you keep it in a qualified retirement plan, none.

If you take the money out, you will have to list it on your tax return & pay taxes, plus pay a 10% penalty (unless you are 59 1/2 years old--in which case there would not be a 10% penalty).

If you need money from the plan, there is another way you may be able to take money out & avoid the penalty. Have it transferred into a qualified retirement plan and arrange to take it in monthly installments for at least 5 years. There are limitations on how much you can take each month.

Go to your bank and ask to speak with an investment advisor for free advice. Also, check with whoever does your taxes before you do anything.

Answer 2

Those are all pretax dollars which means that you should be very careful. The first question is how soon you may need that money. If it is sooner rather than later that could be a real problem. You should be able to rollover all of the 200K directly to your name with no consequences. If you need the money before you are 59 and 1/2 years old you will pay the tax and a 10% penalty. If you are in a community property state you should look at the future value of the 401k when you make a settlement.

Answer 3

It is very important that you also have a Qualfied Domestic Relations Order (QDRO) to order the division of the 401(k) assets. You can open a traditional IRA and transfer your share of the 401(k) funds to it to preserve the tax deferral.
If you decide instead not to rollover the money to a retirement account, you will owe taxes on the entire amount of the distribution. The Federal tax would be 10-15-27 or 30% depending on your tax bracket.You would also pay State tax. Also, If you are under age 59 1/2 and do not roll it into an IRA you would also owe a 10% early withdrawal penalty.
It is much to your advantage to roll it over into an IRA.
Hope this helps.

Answer 4

A 401(k) is funded with pre-tax money, that means no tax (federal or state) has been paid. You would be liable for the whole tax bill, depending on your financial bracket it could be up to 36% Federal and X% State.

As an alternative, have your husband "cash out" the 401(k) and simply give you the $200,000 as part of the divorce settlement, which may or may not be taxable (ask your accountant or lawyer).

Answer 5

If you'd like to continue to use that as a retirement fund, you probably can roll it over into your own retirement fund with no penalty. If not, someone is going to have to pay a 10% penalty and state/federal taxes on top of that. Could be about 40% of the value before it's all said and done

Answer 6

Who says they do no longer pay earnings taxes? They particularly do! it is not everywhere close to forty% on $200k of earnings as one respondent claims, yet human beings with intense earning maximum particularly DO pay earnings taxes. the subject of venture isn't any count number if or no longer they're paying their honest share. A exceedingly paid worker (think of healthcare expert or lawyer) in many situations will pay bigger taxes than somebody who lounges around all day accumulating capital effective factors, qualified dividends, and retained pastime. the optimal value for trouble-free earnings which contain wages is 35% even as many varieties of unearned earnings are taxed at purely 15%. Warren Buffett, between the richest adult adult males on the earth, feels that there is something functionally incorrect with a equipment that has him paying decrease tax expenditures than his secretary does. I genuinely have a tendency to trust him! persevering with the so-referred to as Bush tax cuts for yet another 10 years will boost the funds deficit by utilising yet another $4 trillion money. Letting it roll lower back for the appropriate 2% will shrink that by utilising eighty% or greater. the variation in balancing the funds then falls to looking $eighty billion according to 12 months in cuts (or greater gross revenues) or $4 hundred billion according to 12 months. Which do you think of could be greater ordinary?