Witdrawing Traditional IRA and Taxes?

Question

I withdrew my whole amount from my Traditional IRA. A total of $11,500.00. How much should I put on the side from this amount for taxes purposes at the end of the year?

I also did the same thing on another Traditional IRA acct that i have for a total of $7500.00. How much should I put on the side from this amount for taxes purposes at the end of the year?

I know this was not the smartest thing to do but without going into detail it had to be done...thanks

Answer 1

You'll pay income taxes on whatever you withdrew, at whatever your rate is. Without knowing more about your other income and filing situation, there's no way to even estimate that - but for the total for the two of $19,000, you can probably figure $3000-$5000, maybe more.

If you are under age 59-1/2, there's an additional 10% penalty on the amount you withdrew, so that's another $1900 added to the estimates above.

If they withheld some for taxes when you withdrew it, that will apply to whatever taxes you owe.

Good luck.

Answer 2

It depends on how old you are, whether or not you made after tax contributions and your other income among other things.

If you are under 59 1/2, then you owe a 10% penalty for early withdrawal plus regular income tax.

The company that held the IRA should have withheld at least 20% for federal tax.

Answer 3

Your marginal tax rate plus 10% will be your federal tax and penalty so if you are in a 25% bracket you will owe 35% they probably withheld 20% so you would need to pay 15% more. You need to make sure you have more withholding this year than your tax last year to avoid penalties if you didn't pay estimates.
You may owe your state also or any city you are in.

Answer 4

you're no longer allowed to pay taxes on the IRA money. you mustn't comprise the earnings. you're able to desire to attend till you have withdrawn money. that's no longer optionally available. formally, you're able to desire to point the activity from the financial business enterprise savings account. Unofficially, if the quantity is below $10 and you probably did no longer receive a 1099, then the requirement isn't enforced, and you will ruin out with no longer reporting it. you're no longer allowed to checklist the dividends and capital constructive factors as "tax exempt activity". the only element which you're allowed to checklist as "tax exempt activity" is activity from municipal bonds and issues like that. you're no longer allowed to checklist something from an IRA as "tax exempt activity". Subtracting the contribution isn't optionally available. If that's subtracted, then it may be subtracted. regardless of the shown fact that, in case you have an excellent earnings and your W-2 has a field marked for an company retirement plan, then your contributions could be non-deductible, meaning which you will no longer subtract them.

Answer 5

There's a 10% early withdrawal fee. However, there are some ways to reduce/avoid the fee:

http://beginnersinvest.about.com/cs/iras/a/aairafees.htm