Q: If I take 40,000 out from my 401. How much would nc state federal the out. I am 65
A:
Based on the information you provided, I can give you an estimate of the taxes you may owe on a $40,000 withdrawal from your 401(k) at age 65 in North Carolina.
Federal Income Tax:
At age 65, your 401(k) withdrawal will be treated as ordinary income. Assuming this is your only income for the year, and you're single, your federal income tax would be approximately $4,064 based on the 2023 tax brackets. This doesn't include any deductions or credits you may be eligible for.
North Carolina State Income Tax:
North Carolina has a flat income tax rate of 4.99% for the 2023 tax year. So, your state income tax on the $40,000 withdrawal would be approximately $1,996.
In total, you can expect to pay around $6,060 in federal and state income taxes on the $40,000 withdrawal.
However, please note:
1. If you have other sources of income, your tax liability may be higher.
2. If you have any deductions or credits, your tax liability may be lower.
3. If the 401(k) withdrawal is for certain hardships or medical expenses, you might be exempt from the 10% early withdrawal penalty that typically applies to withdrawals before age 59½.
It's always best to consult with a tax professional for personalized advice based on your specific financial situation. They can help you understand the tax implications and explore any potential strategies to minimize your tax liability.
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