2007-05-25 02:47:42 · 6 answers · asked by cooperfan143 1 in Business & Finance ➔ Taxes ➔ United States
I it would be taxable at your marginal rate. However, there may be an additional 10% for early withdrawal before the age of 59 1/2. You can avoid this penalty under certain circumstances (i.e., disability, higher education expenses, etc.)
2007-05-25 03:23:36 · answer #1 · answered by Tax Man 2 · 1⤊ 0⤋
The precise answer depends on where you live, how much other income you have, and your age.
Just for fun I made a few assumptions
1. NY resident
2. Other income of $50,000 (wages)
3. Under the age of 59.5 (there is a 10% penalty tax)
4. Single, with no dependents.
5. $7,000 federal withheld from wages
6. $3,000 NY withheld from wages
7. No prepayments made for the $50,000 distribution
8. By profit sharing, you mean a retirement account funded by your employer.
Yahoo doesn't support columns, but if you copy this chart and paste it into Word, then use a font like Courier, the columns will line up.
no distribution $50K distrib difference
Adjusted
Gross Income $50,000 $100,000 $50,000
taxable income 41,250 91,250 50,000
federal tax 6,736 19,661 12,925
Sec 72 tax 0 5,000 5,000
NY tax 2,514 5,939 3,425
total taxes $9,250 30,600 21,350
This means that 42.7% of the $50,000 goes to pay taxes, leaving you with only $28,650 of the $50,000.
2007-05-25 07:38:02 · answer #2 · answered by garyg7 7 · 0⤊ 1⤋
If you are doing this on top of your normal income and distribution is early with no exceptions then the total bite is usually 40 to 46 % of it will go bye-bye in taxes; or, 20,000 to 23,000 dollars. Why be stupid? Roll it into an IRA as a direct rollover and avoid any taxes. If you need money for something borrow against it; 7% interest on a loan is a damn sight better than kissing off up to 46% of your hard earned dollars for the politicians to piss off for the benefit of some foreign country where we are hated and despised, wouldn't you say?
2007-05-25 03:40:34 · answer #3 · answered by acmeraven 7 · 0⤊ 1⤋
Depends on what other income you have - it would be taxed at your marginal rate, then part of it could go into the next bracket.
2007-05-25 03:11:25 · answer #4 · answered by Judy 7 · 0⤊ 2⤋
I always use the rule of thumb 25%
2007-05-25 02:54:52 · answer #5 · answered by madbaldscotsman 6 · 0⤊ 4⤋
tax required you for 47%.
2007-05-25 02:55:01 · answer #6 · answered by Fotinila 1 · 0⤊ 5⤋