tax brackets

[paulmars]

I need to take early distribution of retirement funds (about 47k). I can spread this over 2 years. So, I think that after my 5800 std ded and 3700 exemption, my earnings and above distribution (for this year) needs to be less then 35,350, otherwise i go from 15 to 25%
bracket. Is this right?

tks,
p

 

[dannygenio]

BAD IDEA.

Year 1 Year 2
Distribution 37,000 $10,000
Less Std deduc (5800) (5800)
Less Exp (3700) (3700)
Taxable 27500 500
10% penalty 3700 1000
tax liab 3650 0
Total tax paid 7350 1000 = 8350

 

[paulmars]

BAD IDEA.

Year 1 Year 2
Distribution 37,000 $10,000
Less Std deduc (5800) (5800)
Less Exp (3700) (3700)
Taxable 27500 500
10% penalty 3700 1000
tax liab 3650 0
Total tax paid 7350 1000 = 8350

huh? I dont understand.

 

[accountingguru]

With the 10% penalty of paying late it appears that it would be a bad idea.

 

[paulmars]

ok, I'll let them take my home. Who needs a house, when they have 60k in a 401k.

p