What percentage of taxes should I withhold from my IRA distribution?
Asked by: emeka22uche
I have an old 401k I’m thinking of cashing out. It’s from a previous job and is only $ 2500. On the IRA distribution form, it gives me the option to withhold taxes, both federal and state. I know there is an automatic 10% penalty since I’m not at retirement age. Should that be the amount I withhold for federal? And I know that I also have to take out 25% for my tax bracket. So, would that mean I have to withhold 35% federal? And I have no idea what to withhold for state tax, I’m from NJ. Any help is appreciated. Thanks.