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December 20, 2024
Question

I cashed my retirement fund 258752 to buy new house,how much tax will I owe

  • December 20, 2024
  • 3 replies
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    3 replies

    Employee
    December 20, 2024

    We cannot answer that question with only one amount.   We do not know how much other income you received, do not know your filing status, whether you have dependents, etc etc etc.   You also have not told us what kind of retirement fund you cashed out.   If it was a 401k there is no exclusion to the 10% early withdrawal penalty; there is an exclusion to the 10% early withdrawal penalty if you took up to $10K from a traditional IRA to purchase a home.   And.....the distribution is taxable as ordinary income in your tax bracket so you will enter a 1099R on your tax return when you receive it in late January/early February.

     

     

    To enter your retirement income, Go to  Federal> Wages and Income>Retirement Plans and Social Security>IRA  401 k) Pension Plan Withdrawals to enter your 1099R.

     

    **Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**
    VolvoGirl
    Employee
    December 20, 2024

    If it's all taxable you will probably owe a lot.  Was there any withholding taken out of it?   You are taxed on the gross amount, not the net proceeds you got.  

    Employee
    December 20, 2024

    The least possible tax is zero, if it was a Roth IRA and you are over age 59-1/2.  The most possible tax is 60% (!) if this is a pre-tax IRA or 401k, you are under age 59-1/2, you live in a high tax state like California (13% tax rate), and you have other taxable income.

     

    It depends on your age, filing status, other income, what state you live in, and type of retirement account.  You would have to use Turbotax or an estimator like the TaxCaster to get an estimate that fits your facts. 

    TaxCaster tax calculator