Accountant Forums


Reply
Thread Tools

Early Distribution from 401K(cashout) & SS/MED , State Taxes

 
 
Rey
Guest
Posts: n/a
Thanked:
 
      02-03-2005, 06:27 PM
I left my job in 2004 and have been self-employed ever
since. I received full early distribution from my 401K Jan
2005.

Things I know:
10% penalty from total amount
20% already withheld strictly for Federal income taxes

Things I don't know:

1) Since I'm self-employed when I received the distribution,
will I have to pay full self-employment tax (6.2% + 6.2% +
1.45% + 1.45% - 15.3%)?

2) If so, can I deduct 1/2 of that amount that an employer
would normally contribute?

3) Will I have to pay Georgia State income taxes on the
distribution?

4) If so, is it taxed as normal income or handle
differently?

5) Is the taxable amount taxed all the same, or are my
contributions vs employers contributions vs capital gains
all taxed separately and differently with respects to
self-employment tax and state tax?

6) Lastly, should I be withholding from my self-employment
income according to tax bracket after distribution, before
distribution, or do not take in consideration the
distribution at all?

Thanks,
Rey

<< ------------------------------------------------->>
<< The Charter and the Guidelines for submitting >>
<< messages to this newsgroup are at www.asktax.org >>
<< ------------------------------------------------->>
 
Reply With Quote
 
 
 
 
Rich Carreiro
Guest
Posts: n/a
Thanked:
 
      02-07-2005, 05:02 PM
"Rey" <> writes:

> I left my job in 2004 and have been self-employed ever
> since. I received full early distribution from my 401K Jan
> 2005.
>
> Things I know:
> 10% penalty from total amount
> 20% already withheld strictly for Federal income taxes
>
> Things I don't know:


Didn't you just ask all this?

> 1) Since I'm self-employed when I received the distribution,
> will I have to pay full self-employment tax (6.2% + 6.2% +
> 1.45% + 1.45% - 15.3%)?


No.

> 2) If so, can I deduct 1/2 of that amount that an employer
> would normally contribute?


Moot point since answer to (1) is no.

> 3) Will I have to pay Georgia State income taxes on the
> distribution?


I'm not familiar with GA specifically, but if it's like
other states with an income tax, yes.

> 4) If so, is it taxed as normal income or handle
> differently?


Normal income (but see (3)).

> 5) Is the taxable amount taxed all the same,


Yes.

> or are my contributions vs employers contributions vs
> capital gains all taxed separately and differently


No.

> 6) Lastly, should I be withholding from my self-employment
> income according to tax bracket after distribution, before
> distribution, or do not take in consideration the
> distribution at all?


Take the distribution into account.

--
Rich Carreiro

<< ------------------------------------------------->>
<< The Charter and the Guidelines for submitting >>
<< messages to this newsgroup are at www.asktax.org >>
<< ------------------------------------------------->>
 
Reply With Quote
 
 
 
Reply

Thread Tools

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are On
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Invoicing early (to get paid early) boroboy09@googlemail.com UK Accountancy 6 04-16-2008 10:48 AM
Where are all the 'tax' newsgroups: eurozone.taxes, us-canada.taxes, australia-nz-fiji.taxes, carribean.taxes, europe.taxes, asia.taxes, rest-of-world.taxes? Max Power US Taxes 0 03-22-2007 02:41 AM
The Friday early morning Stock Forecast (early for me!) Stocktruth UK Finance 2 09-08-2006 09:12 PM
The Friday early morning Stock Forecast (early for me!) StockTruth Microsoft Money UK 0 09-08-2006 01:23 PM
Close billing cycle early early? Morris Paint Microsoft Point Of Sale 0 06-28-2006 05:13 PM


All times are GMT. The time now is 07:30 PM.
Posts in this forum do not constitute the advice of AccountantForums.com or its members. Financial advice should always be taken from qualified advisors before committing to a financial decision.