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  • TWC is the wine swilling mayor of Two Guns Arizona who was formerly a prolific wine blogger. Some of that remains and to get right to the wine reviews without further distraction, click The Wine Commonsewer Speaks. The rest of the enchilada is an eclectic mix of commentary on culture, food, tax, and econ 101.

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March 27, 2013

Taking Money Out of Your Retirement Account Can Cost Big Bucks

Tax 50 dollar bill + 1040

Revisiting premature IRA/401(k) distributions. Don't take the money without careful consideration. I just completed a tax return for a middle class working couple with one kid. In 2012 they took a distribution from a 401(k) plan. The effective, combined marginal tax rate on that distribution was 50.3%. 

In English: the distribution pushed them into the highest tax brackets and they lost half of their distribution to taxes and penalties.

Tax-crying
For those who don't know, TWC is a tax guy in real life. 

As Always,

The Wine Commonsewer

TWC 🍷

Photo Credit (unless otherwise noted): ©TWC, all rights reserved

Posted by on March 27, 2013 at 11:42 AM in Tax Information |

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