Need help on ? for removal of IRA money

[luvmylittleboy2003]

I'm looking at removing around 19,900 from my IRA (long story - but has to be done).
Can someone give me the amount I would responsible for come tax time. I know there is a 10% withdrawal fee on top of claiming the 19,900 on taxes. I will also be claiming single with no other income (coming out of a divorce).

 

[DebbieB]

It depends on your tax bracket. It would be treated like any other income. So if you make $50,000 this year, you would be taxed on $69,900 plus the penalty on the IRA amount.

 

[luvmylittleboy2003]

That would be my only income for the year, since I was a sahm.

 

[Irish9697]

The $19,900 is taxed as ordinary income, so without knowing more income information (wages, investment income, whether you itemize, etc.), I can't tell you the exact amount of tax you'll pay. It depends on what bracket you're in with all the other stuff and whether this income will bump you up to the next level. But, the 10% penalty is 10% of the gross amount, so you'll owe $1,990 for that. Generally when you take an early distribution from an IRA, they automatically withhold 20% for federal tax. Depending on your bracket, you will probably want to go ahead and have them increase for you.

I see you have a son. Even if you can't claim him as a dependent because of an agreement in the divorce, if you are the custodial parent, you may be able to file Head of Household which is generally very beneficial.

 

[Irish9697]

Assuming you file single and do not claim your son and don't itemize, you can take a $5,700 standard deduction and a $3,650 personal exemption. If it's your only income, your taxable income will be $10,550 which means you are in the 15% bracket.

 

[Irish9697]

Wanted to add that if you are able to claim your son, not only will you get higher exemptions, you will also get a child tax credit. The best case scenario would be if you were to file HOH and claim him...

 

[Cheshire Figment]

I would just grab a copy of last years forms and instrucitons (go to www.irs.gov) and do a returnbased on that and see what it says. You may be able to go to one of the preparer sites and try there also.